Mohammed Azam v Violet Developments LLP & Ors [2025] EWCC 81

[2025] EWCC 81

Case No K10CL392

IN THE COUNTY COURT AT CENTRAL LONDON

BEFORE HER HONOUR JUDGE EVANS-GORDON

ON 13 NOVEMBER 2025

B E T W E E N :-

MR MOHAMMED AZAM

Claimant-and-

(1) VIOLET DEVELOPMENTS LLP

(2) SECURE TRUST BANK PUBLIC LIMITED COMPANY

(3) EAST END HOMES LIMITED

Defendants

JUDGMENT

Between

Mohammed AzamClaimant

Violet Developments LLP & OrsDefendant

Date 2025-11-13

[1]This judgment follows the trial of the forfeiture action brought by Mr Mohammed Azam (“the Claimant” or “Mr Azam”) against Violet Developments LLP (“the first Defendant” or “Violet”). Mr Azam is the freehold owner of the property known as 100 Violet Road, London E3 3QH (“the property”). Violet is, or was, the lessee of the property under a lease dated 14 December 2015 (“the Lease”). Secure Trust Bank Public Limited Company (“the second Defendant” or “STB”) hold or held a first charge over Violet’s leasehold interest. East End Homes Ltd (“EEH”) is the tenant of 23 residential flats which form part of the property under a sub-lease, dated 13 March 2020 (“the Sub-lease”). All three Defendants accept that the lease has been forfeited on the basis of Violet’s breach of paragraph 5.2.5.5 of Schedule 5 of the Lease which required it to provide written reports dealing with the progress of works which are the subject of the Lease. (I will refer to all paragraphs and sub-paragraphs of Schedule 5 as ‘paragraph’ because there are up to three sub-paragraphs and using the full term is unwieldy.) They dispute the other breaches relied on in the notice dated 16 December 2021, served pursuant to section 146 of the Law of Property Act 1925 (“the section 146 notice”) and pleaded in paragraph 21 of the Amended Particulars of Claim. All three Defendants have counterclaimed for relief from forfeiture.

[2]At the start of the trial it became apparent that the Claimant accepted that relief should be granted to the first Defendant but argued for particular terms of relief. That acceptance was in the light of my indications at the start of the hearing given at the request of Mr Hutchings. Having heard the evidence and the submissions, I confirmed my view at the end of the hearing so that the parties can move forward, particularly, in selling the residential properties. Further, it is now common ground that, in the event that I either refused to grant relief from forfeiture to the first and/or second Defendants or that they are not prepared to comply with the conditions of relief, EEH should be granted relief from forfeiture on the terms of the Sub-lease. Given this, Mr Vickery, counsel for EEH was excused attendance at the trial and made no submissions although EEH will be heard on the issue of costs and the detail of the order. For this reason, when I refer to the Defendants in this judgment, I refer only to the first and second Defendants unless stated otherwise. The issues, therefore, concern the terms on which relief should be granted. That, although simply put, is rather more complicated.

[3]The Claimant was represented by Mr Holland KC and Ms Barden. Mr Hutchings KC appeared for the first and second Defendants. The case has been fought tenaciously, though with good humour on both sides, and with great skill and much learning, for which I am most grateful to all counsel.

[4]There is an agreed list of issues which, as edited by me in light of(a) decisions made by me on preliminary applications,

(b) the parties’ positions on the first day of the hearing and

(c) clarification to avoid having to have recourse to the pleadings, are: i) What is the proper construction of the obligation in paragraph 5.2.4 of Schedule 5 of the Lease? Was it engaged at all in the circumstances of the case? ii) Did Violet breach the obligation to use “all reasonable endeavours” in paragraph 5.2.4 of Schedule 5? iii) Did Violet materially breach the obligation in paragraph 5.2.5.1 by reference to the following matters: a) numerous areas of damaged plasterboard in the building which had been partially constructed at the property; b) plasterboard in that building had been left installed for too long in exposed conditions, resulting in damage and mould growth on that plasterboard; c) sections of plasterboard had been removed from the building constructed at the premises due to being too wet; d) metal studwork forming part of the building constructed at the property was damaged; iv) Did the Claimant waive his right to forfeit in relation to antecedent breaches by unequivocally acknowledging the continued existence of the Lease with knowledge of the breaches in any or all of the following communications: a) his solicitors’ letter of 25 November 2021; b) his solicitors’ e-mail of 9 February 2021; c) his solicitors’ letter of 3 February 2021; d) his solicitors’ letter of 12 September 2018; v) What is the meaning of paragraph 5.2.5.4 of Schedule 5 of the Lease, including the meaning of ‘all reasonable endeavours’ I have taken this phrase from the agreed list of issues ? vi) Was Violet in breach of paragraph 5.2.5.4 of Schedule 5 of the Lease in that it did not complete the Works “as soon as reasonably practicable”? If yes, to what extent? Particularly, to what extent up to the date of service of the forfeiture notice on 16 December 2021? vii) For each of the following events, (a) did it constitute “force majeure” or other cause or circumstance beyond Violet’s control; (b) did it cause disruption, delay, postponement or modification to the programme for the Works and/or (c) did Violet use “all reasonable endeavors”[sic] to minimise the disruption, delay, postponement or modification to the Works caused by that matter or event? a) the incursion by travellers in March 2016, the necessity to obtain a Court order for their removal which was achieved on 10 July 2016 and consequent removal of rubbish; b) the preparation and filing of a demolition notice on 29th July 2016 and the demolition of the existing building between 10th August and 5th September 2016; c) the need to reroute HV electricity cables serving a substantial part of London which it was not possible to divert in the manner originally envisaged by the parties at the time when the Lease was entered into; d) the presence of an unidentified 600 mm utility pipe running the length of the site and passing through the area of the proposed basement of the existing scheme and of which there was no record; e) difficult ground conditions arising from an unexpectedly high water table, a problem arising principally as a result of increasing the depth of the basement at the Claimant's request; f) the need to carry out or remediation works to boundary piles contiguous with Violet Road by reason of the ground conditions and the partial collapse of Violet Road; g) the need to redesign the exterior due to changes in construction regulations resulting from the Grenfell tower tragedy; h) the need to redesign the basement pump chambers to accommodate changes in pump specification; i) the COVID-19 pandemic which necessitated closure of the site for over 3 weeks and subsequent strict control measures on site requiring the reduction of labour and observance of strict social distancing rules and caused delays in sourcing materials; j) the impact of Brexit on the availability of labour and materials. viii) What loss and damage has the Claimant suffered as a result of any of the first Defendant’s breaches of the Lease (‘the Breaches’) as referred to in the Amended Particulars of Claim? In relation to this question, are the damages recoverable limited to those which arose on or prior to 1 September 2022 (date of forfeiture)? ix) Have either of the Defendants shown in the circumstances that it is entitled to relief from forfeiture in relation to any admitted or proven material breaches at the date of the forfeiture notice? x) What terms should be imposed as a condition of relief? In particular, ought relief to be conditional on: a) Completion of any Works as defined in the Lease, and as identified in the joint expert report? b) Payment of any damages identified in answer to issue viii) and/or any other sums? c) Payment of, or security for, the sum due under clause 16.3 of the Agreement for Lease made between Mr Azam and Kingport Investments LLP (“Kingport”) on 27 February 2015 (“Agreement for Lease”)? d) What order should be made regarding the Claimant’s costs as a condition of relief?

Background

[5]Mr Azam bought the property in or around 1997 from where he operated a clothing manufacturing business. Having seen Berkeley Homes developing nearby properties, in or around 2007, Mr Azam decided to seek planning permission to construct a better commercial space for his business with 80 to 100 residential flats above. On 10 September 2009 he received planning permission for ground floor and basement commercial premises with 73 residential flats above. After abortive attempts to obtain finance for the redevelopment or an acceptable joint venture partner, he decided to sell a lease of the property to a developer. This would result in him receiving a significant upfront payment with the commercial premises returning to him under a sub-lease. Via a broker, Mr Azam was introduced to Kingport in which a Gary Porter and a Robert King were partners, perhaps amongst others. Having renewed the planning permission in 2012/2013, Mr Azam entered into the Agreement for Lease with Kingport on 27 February 2015. On 14 December 2015 a 999-year lease of the property was granted to Violet. Violet is owned by Gary Porter. Broadly, the terms were that Violet would develop the property to practical completion, Mr Azam would then take a commercial lease of the ground floor and basement. Violet would sell off 50 of the residential flats to private buyers and retain the profits. Upon the sale of such a flat, Mr Azam would be entitled to receive the ground rents. It was a condition of the grant of planning permission that twenty-three of the flats had to be utilised for social housing and would be sold to a social housing provider on a sublease for a term of 125 years. Violet would also retain the profits of selling the 23 social housing flats. Upon the sale of the last residential property, Upon the sale of the last residential property, either party could compel Violet’s surrender of the Lease to Mr Azam who would then be the reversioner on the residential properties and the freeholder of the commercial premises.

[6]The Lease made provision for Mr Azam to ask Violet to carry out additional works to the proposed commercial premises. These are referred to as “Landlord’s Works”, for which Mr Azam was required to pay. The structure in the Lease was that Violet would quote for the requested works and Mr Azam would then signify his agreement. Violet was entitled to refuse to carry out the additional works if an unacceptable delay to completion would be the result. The procedures laid down in the Lease were not strictly or formally followed. However, it is certainly the case that various additional works were discussed and some, particularly increasing the depth of the basement by about 2 metres and extending it to the rear boundary of the property, were carried out. There is a dispute about what other additional works were agreed, if any, and what sums Mr Azam is required to pay for the works that were carried out.

[7]I will return to the covenants in the Lease in due course. Suffice it to say for the moment, that there was a provision providing for a further planning application to permit a larger number of residential properties on the site. That application was never made. The Lease required Violet to use “all reasonable endeavours” to reach Practical Completion two years after any final determination of any existing application to modify planning permission to increase the number of residential flats. It also, separately, required Violet to carry out and complete the development as soon as reasonably practicable after commencement subject to disruption, delay etc outside its control. The development was essentially, a self-build because the main contractor, Formosa Construction LLP (“Formosa”) is owned and controlled by Gary and his brother Ross Porter.

[8]Demolition of the then existing building took place in August and September 2016. Building works commenced on 28 November 2016. The building was built in two blocks or phases. Phase 1 / Block A was situated further from the highway to the north east of the site and Phase 2 / Block B was situated to the south of the site, fronting the public footpath. Capita were appointed by STB to monitor and report on the development. Their initial assessment of the build programme was dated October 2015. Their first report, once construction had started, was dated April 2017 at which point the project was on track.

[9]In July 2017, Mr Azam required the depth of the basement to be increased from 4.5m to 6m. This involved the removal of a proposed car ramp to the basement and its replacement with a goods lift or a “soft spot” for such a lift. These changes required planning permission as a non-material alteration (“NMA”) and caused delay. There were further delays in 2017 to 2018 as a result of the need for UKPN to divert a live electricity cable serving a significant part of London. This caused delays in commencing the piling works for Phase 2. More delays were caused by the discovery of an unidentified utility pipe under the proposed Phase 2, also in late 2018. Further delays in 2019 are attributable to greater excavation works than originally planned, ground water rising in the basement, wet weather and subsidence to the pavement in Violet Road. In 2020, the superstructure of Phase 2 was delayed by wet and windy weather, COVID-19, late approval of a further NMA relating to the removal of metallic cladding to the exterior of the building and replacing glass panel balconies with metal balconies. From approximately August 2020, there were delays attributed to various matters including lack of materials and lack of labour, the supply of utilities, fitting out of flats and completing the weatherproofing of Phase 2.

[10]A Practical Completion Certificate (“PCC”) was eventually obtained on 25 June 2024 although this was on the basis that the commercial premises were to be completed as a shell rather than as a shell and core. While there is a large degree of agreement between the delay experts as to what the delays were, two causes of significant delay are not agreed and there is disagreement about what delay is attributable to Violet and what was beyond its control.

[11]Prior to Practical Completion, the Sub-lease was granted, STB appointed Dalbergia as monitoring surveyor of the works, Mr Azam identified three potential tenants for the commercial premises, or part thereof, the section 146 notice was served, and these proceedings were issued on 15 February 2022. The claim form was served on 1 September 2022. From about October 2022 a Mr David Manning of Dalbergia acted in assisting Violet to complete the development. Following the issue of the PCC, STB appointed administrators over Violet. Mr Azam was offered a lease of the commercial premises but refused on the basis they were not complete.

[12]Violet is balance sheet insolvent and it is unlikely that any unsecured creditors will receive anything. STB has advanced a total of £25.55 million to Violet, £8.6 million of which was advanced after forfeiture in an effort to get the project to Practical Completion and obtain relief. It is owed a further £9 million in interest since December 2021. It is likely to lose £10 million at a minimum and that figure increases by £1 million for each quarter that the residential flats cannot be, or are not, sold. It is the largest loss that STB has ever incurred. As a result of personal guarantees provided by the Porters to STB in the sum of c.£3 million, they are likely to be bankrupt.

The law

[13]The starting point is section 146 of the Law of Property Act 1925 (“s.146”). It provides as follows: “146 Restrictions on and relief against forfeiture of leases and underleases.(1) A right of re-entry or forfeiture under any proviso or stipulation in a lease for a breach of any covenant or condition in the lease shall not be enforceable, by action or otherwise, unless and until the lessor serves on the lessee a notice— (a) specifying the particular breach complained of; and (b) if the breach is capable of remedy, requiring the lessee to remedy the breach; and (c) in any case, requiring the lessee to make compensation in money for the breach; and the lessee fails, within a reasonable time thereafter, to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money, to the satisfaction of the lessor, for the breach.

(2) Where a lessor is proceeding, by action or otherwise, to enforce such a right of re-entry or forfeiture, the lessee may, in the lessor’s action, if any, or in any action brought by himself, apply to the court for relief; and the court may grant or refuse relief, as the court, having regard to the proceedings and conduct of the parties under the foregoing provisions of this section, and to all the other circumstances, thinks fit; and in the case of relief may grant it on such terms, if any, as to costs, expenses, damages, compensation, penalty or otherwise, including the granting of an injunction to restrain any like breach in the future, as the court, in the circumstances of each case, thinks fit.” (a) specifying the particular breach complained of; and (b) if the breach is capable of remedy, requiring the lessee to remedy the breach; and (c) in any case, requiring the lessee to make compensation in money for the breach; and the lessee fails, within a reasonable time thereafter, to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money, to the satisfaction of the lessor, for the breach.

[14]There is broad agreement on the applicable legal principles save for two points. The first is that, in reliance on First Penthouse v Channel Hotels [2004] L & TR 27 and Woodfall on Landlord and Tenant at 17.105, the Defendants assert that a covenant which obliges completion ‘as soon as reasonably practicable’ if breached, constitutes a once and for all breach unless there is a provision in the lease which is inconsistent and indicates a different meaning or intent. The Claimant asserts that it is a question of construction of the individual contract. It is trite law to say that the meaning of words used in a contract is a matter of construction of that contract. However, it seems to me that where superior courts, such as the Court of Appeal and the High Court have repeatedly said that an obligation to perform an act by a given time creates a single obligation and not a continuing one (Farimani v Gates [1984] L.R.L.R. 472; First Penthouse Ltd v Channel Hotels and Properties (UK) Ltd

[2004] EWCA Civ 1072

; Equitas Ltd v Walsham Bros & Co Ltd

[2013] EWHC 3264 (Comm)

), those decisions are binding on me unless the Claimant can point to an inconsistent provision in the Lease. Further, I note that in First Penthouse the court was considering a lease which provided for the tenant to use all reasonable endeavours to carry out and complete a development in accordance with a specific time scale. Peter Gibson LJ, with whom Keene LJ and Maurice Kay LJ agreed, held that those words “plainly” created a once-and-for-all obligation rather than a continuing obligation. Whether there is an inconsistent provision in this case, is a matter of construction which I will address when determining issue v) below.

[15]Secondly, there is a dispute about whether the court can require breaches of the lease which are not relied upon in the s.146 notice to be remedied (or compensated for) as a condition of relief. The Claimant says it may because, upon relief being granted, the lease is revived, and the discretion is a wide one. The Defendants say not: the court is limited to the s.146 breaches and further, limited to those breaches which have not been remedied or waived. Both parties rely on what was said in Hyman v Rose

[1912] AC 623

; Vauxhall Motors Ltd v Manchester Ship Canal Co Ltd

[2019] UKSC 46

and Çukurova Finance International v Alfa Telecom Turkey Limited (Nos 3 to 5)

[2013] UKPC 2

. The Defendants also rely particularly on Thomas v Ken Thomas

[2006] EWCA Civ 1504

[16]The second issue is more difficult and is of critical importance to both parties. If I find that the terms of relief are limited to the unremedied and unwaived breaches set out in the s.146 notice, the only such breach that has not been remedied or waived is the failure to provide written reports dealing with the progress of the works. That breach cannot be remedied, and it is not suggested that the breach is something for which compensation can or should be paid. This would leave the Claimant without recompense for delay in completing the development which has left him out of pocket in relation to the ground rent he would have received had the development completed on time and/or the capital value of the ground rent which was lost as a result of the Leasehold Reform (Ground Rent) Act 2022 and the loss of rental income on the commercial premises. It would also leave him without a remedy for the failure to complete the commercial premises in accordance with the planning permission and Lease. Mr Hutchings says that the grant of relief would leave the Claimant in the same position he would have been in had the forfeiture not occurred, i.e. with a claim for damages for breach of covenant against Violet. As Mr Holland points out, that is a worthless remedy because Violet is hopelessly insolvent and unsecured creditors are unlikely to receive anything.

[17]The court’s discretion under s.146 and its statutory predecessors is very wide, and the courts may not place fetters upon the scope or exercise of that statutory discretion (Hyman v Rose

[1912] AC 623

, 631-632). It is wider than that previously exercised by the courts of equity (Çukurova at [121]-[124] of the majority judgment,[92], per Lord Neuberger, with whom Lord Sumption agreed). In Hyman v Rose, the House of Lords made it a condition of relief that the tenant provide security for the restoration of alterations at the end of the lease. This was a condition that related to covenants unconnected to forfeiture. In Southern Depot Co Ltd v British Railways Board

[1990] 2 EGLR 39

the tenant, Southern Depot, was in breach of its lease by permitting the premises to be used as a carpark and for storing building materials, by parting with possession of the premises and by failing to lodge with the landlord, British Railways Board (“BRB”), a copy of a declaration of trust which constituted “an instrument affecting the demised premises”. A s.146 notice was served citing those breaches. However, unbeknownst to BRB, the premises were also used as a marshalling yard for lorries and for loading them with newspapers. As a condition of relief the court required the tenant (in reality, its licensee and the beneficial tenant under a declaration of trust) not only to pay for the unauthorised use for car parking both before and after forfeiture but to pay additional damages for the unauthorised use as a marshalling yard. These cases, says Mr Holland, establish that the court’s discretion is wide enough to permit it to impose conditions that do not relate to the s.146 breaches and that postdate the forfeiture.

[18]Mr Hutchings submits that that the discretion to grant relief is not unbounded. He says that it is constrained within “principled boundaries” as Lord Briggs JSC said in Vauxhall Motors at [2]. The right to forfeit is security for the enforcement of a primary obligation therefore relief conditions must be restricted to those relevant to the obligation which has given rise to forfeiture. He points to Lady Arden JSC’s judgment, also in Vauxhall Motors, at [70] where she said:

“The fundamental principle was, as Lord Briggs JSC has said, that equity intervenes to restrain forfeiture where (1) the right had been conferred to secure the performance of some other covenant, he was now in a position to perform it and pay any compensation that might be appropriate: see Peachy v Duke of Somerset (1721) Fin PR 568. These are the preconditions to relief from forfeiture in the sense that they must be present, but they are not necessarily sufficient of themselves to justify the intervention of equity, even putting on one side the exercise of the judge’s discretion.”

As was said in Çukurova by Lord Mance JSC at [25], the object in granting relief is to put the landlord back in the position he would have been in if the lease had not been forfeited (citing Bland v Ingrams Estates ltd (No2)

[2002] Ch 177

, 184).

[19]Mr Hutchings points out that there was no argument about the issue of relief conditions in Hyman and in Southern Depot because in Hyman the tenant offered to provide security for restoring the alterations and in Southern Depot it was conceded that damages for unlawful use would be paid as a condition of relief. He said he was aware of no case where, after argument, the court had imposed conditions relating to non-s.146 breaches, waived breaches or any relating to post-forfeiture breaches. Mr Hutchings relies on Associated Deliveries Ltd v Harrison

[1985] 50 P & CR 91

in which Dillon LJ held that, following forfeiture, a landlord could not recover rent, only mesne profits or damages for trespass. Nor could he recover damages for breach of a repairing covenant that post-dated forfeiture, the remedy lay in tort. Finally, Mr Hutchings took me to Thomas v Ken Thomas, a case involving forfeiture for nonpayment of rent in which Neuberger LJ, as he then was, held that the only condition that could be imposed was payment of rent in respect of non-payment of which the forfeiture was based. The court could not require the tenant to pay rent arrears in relation to which the right to forfeit had been lost i.e. which pre-dated the forfeiture and which had been waived. Mr Hutchings says, somewhat chillingly for a county court judge, that if I impose conditions relating to ground rent or completing works to the commercial premises, I will be making new law in this well-established field.

[20]One of the difficulties is that most of the highest authorities to which I have been taken on the issue of the width of the discretion do not concern s.146 at all. Shiloh Spinners Ltd v Harding

[1973] AC 691

concerned a right of re-entry in an assignment of a lease; Vauxhall Motors concerned forfeiture of a licence to discharge surface water and trade effluent into a canal; Çukurova concerned relief from forfeiture of an equitable mortgage in the British Virgin Islands. In all those cases the court was concerned with the application and limits of purely equitable principles and discretion. As Lord Neuberger noted in Çukurova at [92], equity had acted very sparingly in granting relief for breaches of covenant other than non-payment of rent. Section 146 and its predecessors gave the court power to grant relief on “such terms … as the court, in the circumstances of each case, thinks fit”. That created a distinction between equitable and statutory powers with the latter replacing the former in relation to relevant breaches. Hyman v Rose, a case that did involve the predecessor to s.146, made it clear that the discretion is very wide indeed and that the courts should not lay down guidelines as to when the power might be exercised or on what basis.

[21]In my judgment, Mr Holland is correct. The statutory jurisdiction is very wide - wider than the old equitable jurisdiction and permits the court to impose conditions for relief that go beyond those breaches on which the forfeiture is based. This is consistent with the spirit of Earl Loreburn L.C.’s words in Hyman when he said, reflecting the statutory words, the court must consider “all the circumstances and the conduct of the parties”. In my judgment, the conduct of the parties can include breaches other than those identified in the s.146 notice, particularly, if the lack of a relevant condition would leave the landlord out of pocket or otherwise disadvantaged. Indeed, it seems to me that ‘all the circumstances’ of the case also permits such consideration. While a landlord might have a cause of action in tort, or breach of covenant, it seems to me to be a waste of time and money to require him to commence a second set of proceedings, or even to plead a cause of action in tort, when it is clear from the pleadings and the evidence what is being sought and the court concerned with the grant of relief has all necessary evidence on which such a claim could be determined. It also offends the principle in Henderson to the effect that all matters in dispute between the parties should be addressed in one claim. A lessee should not be in a better position vis-à-vis its liabilities under the lease, or the landlord in a worse one if relief is granted. In a case such as this, Violet would be significantly better off because it has significantly improved its financial position, and that of STB, in what is called the ‘twilight period’, by remaining in possession of the premises and completing the development after forfeiture. I cannot see how it would be outwith the landlord’s just desserts to receive recompense for his losses out of the gains made by the tenant. As Lewison LJ put it in Jervis v Pillar Denton Ltd

[2014] EWCA Civ 180

, albeit in the context of payment for occupation during an administration, “you can’t have the penny and the bun”.

[22]I note that in Hyman Earl Loreburn L.C. imposed the security condition “without too curiously inquiring into whether the offer is in excess of what the Court would exact”. This does leave room for Mr Hutchings’ argument about the limits on relief but it seems to me that Earl Loreburn L.C. equally left open the position that the court might exact it. Of course, in Hyman, the House of Lords had found that the alterations were not, in any event, a breach of covenant which may explain the lack of curiosity. Nothing is said in Southern Depot which helps resolve this issue.

[23]Lord Briggs JSC’s words in Vauxhall Motors related to the equitable jurisdiction. In saying that, I do not mean that the statutory jurisdiction is completely unbounded. Conditions for the grant of relief must, in my view, be concerned with the tenant’s obligations under the lease. They cannot extend beyond the contractual obligations. Beyond that, however, if conditions are required to do equity between the parties and they relate to conduct which has damaged the landlord’s interest under the lease, they fall within the scope of the wide statutory discretion. This would not render the law uncertain, or at least any more uncertain than the exercise of a discretion involves. All parties in any given case would know what covenants had been breached, or the court would resolve disputes as in this case. In my view, Lady Arden JSC’s judgment in the Vauxhall Motors case at [70] was directed at the conditions that must be in place before relief will be granted and not at the conditions on which it will be granted. Indeed, to the extent that she said the covenantor must be in a position to remedy the breach, this is not strictly accurate as relief may be granted without remedy of the breach but with a payment in lieu in an appropriate case (Associated British Ports v CH Bailey plc

[1990] 2 AC 703

at 708B-D). Further, Lady Arden JSC acknowledged that the preconditions may not be sufficient to warrant relief, something more may be required. Putting the landlord back in the position he would or should have been in had the forfeiture not occurred or, to put it another way, had the tenant complied with its obligations under the lease, may well involve carrying out works or paying compensation in relation to matters occurring after forfeiture. Also, Lady Arden JSC was considering the grant of relief in equity and not under the wider statutory powers.

[24]Associated Deliveries does not assist Mr Hutchings. It is a case where the lease was forfeited when a possession order was made. Relief was neither sought nor granted. The forfeiture related back to the service of the writ. As the lease had terminated, rent was no longer recoverable, only mesne profits or damages. Any post forfeiture damage could not be recovered under the lease. That situation is very different to one where relief is being granted and the lease is treated as if the forfeiture had not occurred. In my judgment, in such a situation, a court can, in an appropriate case, require post forfeiture breaches to be remedied or compensated without requiring a fresh action. Thomas v Ken Thomas is not helpful to Mr Hutchings either. It concerned forfeiture for non-payment of rent. Such cases are subject to s.138 of the County Court Act 1984 not s.146. A wholly different statutory regime applies in such cases not least because s.138 mandates relief on payment of arrears and costs. Further, I note that by reference to Maryland Estates Ltd v Joseph

[1999] 1 WLR 83

, Neuberger LJ accepted that, even in s.138 cases, the statute and the court required the payment of all rent falling due in the twilight period to be paid before relief is obtained. Payment of rent was not limited to the arrears relied on for the forfeiture. Lord Neuberger would, no doubt, be surprised to hear today that in Thomas he was laying down a principle applicable to s.146 when that section and the cases addressing it, had not been mentioned. Dendy v Evans

[1910] 1 KB 263

is not of particular assistance to Mr Hutchings either as the primary issue was whether relief granted in relation to a head lease revived a sub-lease. It did, with the consequence that the assignee of the sub-lease was entitled to recover rent from the sub-lessee payable during the twilight period.

[25]Save as aforesaid, I have drawn the following principles of law from the parties’ skeleton arguments. I circulated them in advance and, again subject to the foregoing, they are agreed although their applicability in this case and the consequences of applying them to the facts are hotly contested. Construction i) In accordance with The Tropical Zoo Limited v The Mayor and Burgesses of the London Borough of Hounslow

[2024] EWHC 1240 (Ch)

, which itself is a summary of the principles derived fromRainySkyvKookminBank[2011] UKSC50,ArnoldvBritton [2015] UKSC36andSara & Hossein v Blacks

[2023] UKSC 2

, the court’s approach to contractual construction is: a) To interpret it objectively in light of the language used and what a reasonable person, with all the background knowledge reasonably available to the parties at the time the contract was entered into, would have understood the parties to mean; b) To interpret the contract in a unitary way having regard to the contract as a whole and all the relevant surrounding circumstances, giving such weight to the language used and the wider context in light of the nature of the contract and the formality, complexity and quality of the drafting; c) Consider the likelihood of rival constructions, by giving weight to the implications of those constructions by considering which is more consistent with business common sense but always objectively rather than on the basis of what the parties might reasonably have agreed; d) Interpretation is an iterative process by which each suggested interpretation is checked against the provisions of the contract, and the implications and commercial consequences of each rival construction ii) The court may read instruments non-literally, correcting obvious drafting errors, where it is clear that there has been an error, and it is clear what the parties must have intended (Monsolar IQ Ltd v. Woden Park Ltd [2022] 2 P. & C.R. 10); iii)the meaning of “all reasonable endeavours” depends on the precise wording and context in which the wording arises. It usually means “all reasonable paths or actions to be exhausted” and may be the same as “best endeavours”. However, “best endeavours” may mean the sacrifice of commercial interests by the obliged party but “all reasonable endeavours” is less likely to do so. Even “reasonable endeavours” can, in the right context, require commercial sacrifice (Brooke Homes (Bicester) Limited v Portfolio Property Partners Limited

[2021] EWHC 305 (Ch)

at [97] and the cases there cited); iv) Whether a breach is material must be judged objectively by considering a) the context of the clause in which it appears, b) the nature of the breach, and c) by the consequences flowing from the breach (Fitzroy House Epworth Street (No) Ltd v. Financial Times Ltd

[2006] EWCA Civ 329

; Riverrock European Capital Partners LLP v. Harnack

[2022] EWHC 3270 (Ch)

); Forfeiture v) The purpose of a right of forfeiture is to provide security for performance of the tenant’s covenants, not to operate as an additional penalty for breach (Megarry & Wade: The Law of Real Property at 17-06); vi) A right to forfeit is waived where a landlord(a) with knowledge of the facts upon which the right of forfeiture arises

(b) does some unequivocal act, objectively considered, recognising the continued existence of the lease and

(c) that act is communicated to the tenant. The act must be so unequivocal that, when considered objectively, it could only be consistent with the continued existence of the tenancy (Woodfall 17.092-093; Tropical Zoo Ltd v. Hounslow LBC

[2024] EWHC 1240 (Ch)

); vii)A covenant which obliges completion ‘as soon as reasonably practicable’ is a once and for all breach unless there is an inconsistent obligation in the lease (First Penthouse v Channel Hotels [2004] L & TR 27; Woodfall on Landlord and Tenant at 17.105); Relief viii)The discretion to grant relief from forfeiture is a wide one (Woodfall 17.165); ix)Although the court’s discretion is very wide, it has to consider all the circumstances and the conduct of the parties to ensure that a landlord cannot forfeit what, in fair dealing belongs to the tenant, by taking advantage of a breach from which he is not commensurately and irreparably damaged (Hyman v Rose

[1912] AC 623

); x) The general principle which governs the formulation of terms for relief against forfeiture is that the landlord is entitled to be put in the position he would have been in but for the forfeiture (Woodfall at 17.165 & 17.169); xi) In an appropriate case the court can relieve a tenant from forfeiture without requiring the breach to be remedied (Associated British Ports v CH Bailey

[1990] 2 AC 703

); xii)A disproportionate windfall to a landlord is a factor which weighs heavily in favour of relief being granted (Freifeld v West Kensington Management [2016] L&TR 5 at [47]; Southern Depot Co Ltd v British Railways Board

[1990] 2 EGLR 39

); xiii)Conditions for relief may include: a) payment of any increased rent which would have resulted from the operation of the rent review provisions during the period prior to the grant of relief (Bland v. Ingrams Estates Ltd (No 2)

[2002] Ch. 177

, as endorsed by The Lord Neuberger in Cukurova Finance International Ltd v. Alfa Telecom Turkey Ltd (Nos 3 to 5)

[2013] UKPC 2

); b) undertakings to perform all the covenants which had been breached including ones not contained in the section 146 notice (Southern Depot Co Ltd v British Railways Board [1990] 2 E.G.L.R 39); c) requiring a tenant to carry out work to the demised premises as a condition of relief: Shiloh Spinners Ltd v. Harding

[1973] AC 691

p. 723); d) The court may impose conditions related to breaches of covenant other than those relied on in the s.146 notice in appropriate circumstances. Damages xiv) Once a lease is forfeited either because there is no application for relief or a possession order is made, the landlord cannot rely on the lease covenants at all following the date of forfeiture and a tenant is not liable for breaches that post-date a valid forfeiture but only for e.g. mesne profits. Other damage arising during the period of occupation post service of proceedings may be compensated for by a claim for damages in tort (Associated Deliveries v Harrison

(1985) 50 P & CR 91

); xv)If relief is granted a landlord may then sue on breaches during the twilight period (Dendy v Evans

[1910] 1 KB 263

). xvi) As against the tenant, a lease is not terminated by service of proceedings, so long as there is a subsisting application for relief from forfeiture (Liverpool Properties Ltd v. Oldbridge Investments Ltd [1985] 2 E.G.L.R 111 at p.112 per Parker LJ; Woodfall: Landlord and Tenant at §17.091.2); xvii)The fact that, technically, the lease terminated on the service of the proceedings is irrelevant as relief from forfeiture resurrects the lease term retrospectively. The lease will only have terminated if an order for possession is made (Woodfall at 17.175;MountCookLandvMedia BusinessCentre[2004] 2P. & C.R.25); xviii)Where a tenant remains in a property for its own commercial advantage and the lessor is unable to obtain possession, the landlord is entitled to the full value of the property. Or, as Lewison LJ put it in Jervis v Pillar Denton Ltd

[2014] EWCA Civ 180

, “you can’t have the penny and the bun”. xix) The question of whether a particular loss is recoverable turns on whether it is the type of loss which was contemplated by the parties when the lease was entered into (Chitty at §30-131; Transfield Shipping Inc v. Mercator Shipping Inc

[2008] UKHL 48

[26]More generally, the burden of proof lies on the shoulders of he who asserts a fact. The standard of proof is balance of probabilities. The most reliable evidence of fact is that found in contemporaneous documents rather than potentially unreliable memories, particular when events occurred many years ago. The court may draw adverse inferences if a witness who might be expected to provide material evidence is not called. Further, the court may go further and make a finding on the basis of inherent probabilities or even make no finding at all for want of evidence. In making findings of fact, I must consider all the evidence in the round and in the light of inherent probabilities.

Evidence of Fact

[27]I heard oral evidence from the Claimant and his son, Sultan Azam. Mr Azam is the only person who was personally involved throughout the relevant period. He plainly has a genuine sense of grievance attributable to the delay in completing the development and what he sees as Violet’s failure to carry out certain works which he believes it had agreed to carry out. This has caused him loss. In my view he was an honest witness although, unsurprisingly, given the passage of time, there were matters he did not recall at all and some of his memory was not always reliable. Mr Sultan Azam stated repeatedly that his memory is not very good. He had recorded various conversations with Mr Gary Porter and/or Mr Ross Porter because of this and his witness statement was based largely on these recordings. However, despite this, his witness statement was inaccurate. Mr Sultan Azam stated that, having listened to a recording of a meeting on 8 December 2016, at that meeting the Claimant suggested that the Porters owed him many years of rent. That simply cannot be correct because the construction was still within its first year in December 2016 therefore there can have been no question of any rent being owed to the Claimant. I have not been provided with copies or transcripts of the recordings. Given his poor memory and clear inaccuracy in relation to the recordings, I cannot place much reliance on Mr Sultan Azam’s evidence.

[28]For the Defendants I heard from Mr David Hudson, one of the administrators of Violet. His expertise is in restructuring and insolvency. Mr Hudson has no personal knowledge of the events of this case prior to February 2024 when STB contacted his firm to discuss placing Violet into administration. He told me that the Porters stopped communicating which is why they have not been called as witnesses. Mr Hudson tried to reach them after 4 July 2024 but they did not respond.

[29]For STB, I heard from Mr John Patrick Griffin, its managing director of Real Estate Finance. He has no personal knowledge of the development prior to August 2021. His knowledge thereafter derives primarily from conversations and reports from a Mr Paul Keeping who was the senior relationship director in Mr Griffin’s team responsible for the day-to-day management of the loan to Violet. However, due, no doubt, to the threatened forfeiture and escalating debt, Mr Keeping was being supervised by Mr Griffin’s predecessor, a Geoff Ray, from August 2022 until the latter’s retirement in April 2025. Mr Keeping has been on sick leave since March 2025 and was unable to give evidence. Finally, I heard from Mr David Manning, the ‘problem-solver’ appointed by Dalbergia in October 2022 who, in effect, supervised the completion of the development. He has expertise in construction contracts and risk management with some experience in project management. He has no personal knowledge of the events before October 2022. It is fair to say that he presented a rather better picture of the Porters’ management of the development in writing than was warranted, something he accepted in cross-examination.

[30]None of the witnesses of fact were of great assistance in relation to the primary issues before me namely, what delay was beyond Violet’s control and what is attributable to Violet; the rental value of the commercial premises and the costs of completing the commercial premises in accordance with the planning permission and Lease.

[31]Mr Holland invites me to infer that the Porters, had they given evidence, would have either supported Mr Azam’s case or undermined Violet’s. Had the Porters been prepared to give evidence, they may have been able to assist the delay experts by providing more detail on the progress of the development. It is difficult to determine whether their evidence might have supported the Defendants or Mr Azam as they have reason to be unhappy with both. They are deeply in debt to STB and possibly insolvent as a result. However, they are also likely to blame Mr Azam’s requirements for causing delay and seek to exculpate themselves. The only material I have from either Gary or Ross Porter are some notes prepared by Mr Ross Porter setting out his account of the development and its (lack of) progress. I am not entirely clear as to when these notes were prepared. It was clearly after April 2023 because the notes contain references to emails in that month. It seems likely that they were prepared between 12 July 2024 and 27 March 2025 when Ross Porter ceased communicating with the Defendants. The notes contain at least one critical reference to Mr Azam.

[32]Mr Hudson told me that while he had contact details for the Porters, they had not attempted to obtain witness statements from either of them because it would have been, in effect, a pointless exercise. The Porters had ceased responding to the administrators and their solicitors after 27 March 2025 (see the Hearsay notice of 7 July 2025). In his oral evidence, Mr Hudson told me that they decided not to call the Porters because they had stopped communicating. He also told me that he had reached out to them after completion of his witness statement which is dated 4 July 2025. There was no response.

[33]In my judgment, this is plainly not one of those cases which falls within the “narrow rule” relied upon by Mr Holland. Indeed, I find myself wholly in agreement with Cockerill J at [150] of Magdeev v Tsvetkov

[2020] EWHC 887 (Comm)

in being asked to devote time to this point. This is not a case where either side’s witnesses are being accused of lying. Nor is this a case where the Defendants have any control or even influence over the Porters. I am satisfied that attempts have been made to contact them with no success. I am not satisfied that the Defendants would have been successful in an attempt to compel the Porters to give evidence, they may have retired to a property in Florida. I am certainly not satisfied that a deliberate decision was made not to call them because of the evidence they might give. I decline to draw any adverse inferences from the fact that they did not give evidence.

Expert Evidence

[34]I heard evidence from Matthew Peter Neave (“Mr Neave”), the single joint expert instructed to report on(i) whether the property has been built in a good and workmanlike manner in accordance with high-class standards usually applied by a person skilled in the relevant trade in the execution of such works;

(ii) what works, if any, are required to put the property into the state and condition it would have been in if the Works have been carried out in a good and workmanlike manner; and,

(iii) provide a timescale for any works required pursuant to (ii). During the course of the hearing , Mr Neave was asked to produce an estimate of the costs of carrying out any necessary work. I am very grateful indeed to Mr Neave for the work he did on this issue, it has assisted me greatly. He provided a written report dated 11 July 2025 (“the Works report”) in which he found that the residential flats had been completed to a high standard save for a few ‘snagging’ issues which should not take more than eight weeks to address. The incomplete works primarily affected the ground and basement commercial area. They are more substantial and would cost £434,584.33 plus VAT in total and take up to 6 months to complete. Mr Neave’s evidence was not subject to any significant challenge and I have no hesitation in accepting it. Of course, there is still the issue of liability for the costs of such works.

[35]On the issue of delay and its causes, I heard from Mr Moreira for the Claimant and Mr Gouldby for the Defendants. There is a significant difference between them with Mr Moreira attributing 97 – 118 weeks of delay, say 108 weeks, to matters beyond Violet’s control and a delay of 190 – 211 weeks, say 200 weeks, to matters within its control. Mr Gouldby’s view is that the delay attributable to matters beyond Violet’s control is 193 weeks while other delay is 115 weeks. The difference between the experts is 85 weeks which is an unusually large difference. This is attributable, in large part, to the lack of contemporaneous material dealing with the progress, or lack of progress, in the development. I will address the differences in their evidence when making a decision on the issue.

[36]Finally I heard from valuation experts in relation to the capital value of the ground rents on the residential flats and the rental value of the commercial premises.

[37]All of the experts gave their evidence in a measured professional way.

[38]I have read the pleadings, the witness statements, the Lease and all the other documents to which I was taken in course of the hearing and in oral and written submissions. I have also read all the parties’ written submissions including those lodged in the 10 days or so after the hearing had completed. I have not attempted to read the balance of the 22 lever arch files and 3 ring binders running to something of the order of 10,000 pages with which I was provided, nor was I asked to do so.

Findings of fact

[39]I turn first to the findings of fact that the Claimant asks me to make.

[40]It is not in dispute that Gary Porter requested the Claimant to grant the Lease to Violet rather than Kingport or that he was acting for both entities when he did so. The issue is the effect of that in relation to clause 16.3 of the Agreement for Lease.

[41]The Agreement for Lease contained the following clause:

“16.1 The Buyer [Kingport] will promptly prepare and submit a planning application or applications to increase the residential component of the scheme previously approved by the consent No PA/12/02494 dated 15 August 2013; ….. 16.3 If in breach of the provisions in this clause 16 the Buyer fails to submit a further application or is otherwise in breach as compensation for that breach the Buyer agrees that compensation of £500,000 (FIVE HUNDRED THOUSAND POUNDS) shall be payable to the Seller [the Claimant] on practical completion of the redevelopment of the property referred to in the Lease and on Completion the Buyer shall enter into such deed as the Seller reasonably requires to adequately secure liability for that payment against the Property”

HUNDRED THOUSAND POUNDS) shall be payable to the Seller [the Claimant] on practical completion of the redevelopment of the property referred to in the Lease and on Completion the Buyer shall enter into such deed as the Seller reasonably requires to adequately secure liability for that payment against the Property”

[42]Notwithstanding the fact that both parties acted through solicitors, there is very little contemporaneous documentation dealing with the issue. Further, the correspondence that there is does not clearly state the identity of the client for whom Graeme Taylor of Gelbergs, Violet’s then solicitor, was acting at any given time. It seems that by 25 September 2015, it had been agreed that the Lease would be granted to Violet. An email of 25 September 2015 from the Claimant’s solicitor to Mr Taylor states that the Claimant wants the obligation to pay him £500,000 in the event no planning application has been made for additional flats to be secured by a term in the Lease. He had already sought this from Kingport on 1 September 2015. The response dated 25 September 2015 said that “my client” has no intention of paying the additional sum because the required planning application would be made. The Claimant’s solicitor disputes the response on the same day. On 29 October 2015, the Claimant’s solicitors again write to Mr Taylor pursuing the requirement that the payment of £500,000 be included in the Lease. By 8 December 2015, the Claimant’s new solicitors, are insisting that the Lease is granted to Kingport pursuant to the Agreement for Lease. On the same day Mr Taylor responds asserting that the Claimant is not entitled unreasonably to refuse consent for “the assignment of the contract” and, in any event, he had already agreed to the assignment through his previous solicitors. He states “My client requires completion in the name of Violet Developments LLP”. The Lease is granted to Violet on 14 December 2015. It does not include a provision requiring Violet to pay a further £500,000 nor is there any other document suggesting that Violet will take on Kingport’s liabilities under the Agreement for Lease.

[43]On 14 November 2016, Mr Azam wrote to Gary Porter at Kingport stating:

“you should have also entered into “such deed” as reasonably required to secure your liability under that clause. I don’t have a record of any such deed being entered into. If my solicitors did get you to sign such a deed, could you please let me have a copy. If you haven’t entered into one, I will get my solicitors to prepare a short charge for agreement and completion.”

A similar letter was sent to Violet on the same day. The next time this issue was raised was in an email from Mr Azam to Gary Porter of 23 June 2017 in which he said “I also required that you confirm by return that you will enter into the security for the £500,000.”

[44]On 30 November 2017 Mr Azam’s new solicitors wrote to Mr Taylor referring to the Lease and the Contract for Lease and asserting that the obligation to pay £500,000 arose from the Contract for Lease with Kingport. They say that their client’s understanding was that the Contract for Lease was effectively transferred from Kingport to Violet but that they have been unable to locate a signed copy of a novation agreement or assignment despite requests made by previous solicitors. On 14 December 2017 there is a response from an Alaa Jafferali of Gelbergs stating:

“our clients fully intend to make the application for the additional flooring promptly at the appropriate time ………. it is not accepted that your client is entitled to payment of £500,000 or indeed any damage pursuant to clause 5.2.4 of Schedule 5 or otherwise.”

[45]Mr Holland submits that the email of 8 December 2015 from Mr Taylor establishes that the Claimant agreed to grant the Lease to Violet “having been told that there was no difference between an assignment and a novation.” There is no mention of the word novation in any of the documentation that I have seen other than in November 2017 by Mr Azam’s solicitors. There is certainly no evidence that the question of novation was mentioned by Kingport/Violet’s solicitors or, indeed, by Mr Azam’s solicitors prior to the grant of the Lease. In his written evidence Mr Azam merely says that as part of the agreement he reached with Gary and Ross Porter, he expected them to make a planning application to add two extra floors or to pay him £500,000 if they did not make the application. This is plainly a discussion held before the Agreement for Lease was entered into because it features in that Agreement. It seems to me therefore, that that agreement was reached with Gary Porter acting at the time for Kingport and not for Violet. The latter did not seem to feature in any of the discussions or documents until after the Agreement for Lease had been executed. In his oral evidence Mr Azam relied on the fact that Mr Gary Porter never made a distinction between Kingport and Violet and that he was dealing with Mr Gary Porter as director of both companies.

[46]Given the correspondence between the parties’ respective solicitors I am not satisfied that Violet did agree to take on Kingport’s liability under clause 16.3 of the Agreement for Lease. On the contrary the email exchanges make it quite clear that Violet is not prepared to accept any formal obligation to make payment of that sum. Further, an assignment of the Agreement for Lease could only have transferred the benefit of that agreement not the burden as the parties’ lawyers would have known. The obligation was Kingport’s and not Violet’s. It does not appear that a formal, in the sense of written assignment or novation of the Agreement for Lease, was ever entered into. In his oral evidence Mr Azam stated that he had never been given a novation agreement or assignment. Further, the Claimant’s instructions to the Cumming Group in 2020/2021 were that “The obligations under the Agreement [for Lease] were not novated to Violet and no steps were taken to secure that liability [payment of £500,000]” [G8/4577]. If Mr Azam was informed that there was no difference between an assignment and a novation in 2015 that is a matter between him and his then solicitors; there is no evidence that this representation was made to him by either Kingport or Violet.

[47]Further, I am not satisfied that novation has been pleaded or adequately covered in the Claimant’s evidence, as set out above . The Amended Reply and Defence to Counterclaim of the First Defendant, the pleading on which Mr Holland relies, refers to Kingport’s obligations under the Agreement for Lease. It asserts that Mr Gary Porter was a designated member of both LLPs and that no further application for planning permission was made by either Kingport or the First Defendant. Finally, it refers to Mr Porter’s request that the Claimant grant the lease of the premises to Violet and that he was acting for both Violet and Kingport at the time. There is no mention there of even an assignment of the Agreement for Lease never mind a novation. The only other pleaded reference to the £500,000 appears in paragraph 48 which simply asks that provision of security for the sum due under clause 16.3 of the Agreement for Lease be one of the terms on which relief is granted. Whatever may or may not appear in the pleadings, it seems to me that the evidence, even that of the Claimant, simply does not support an allegation that Violet took on Kingport’s obligation under clause 16 of the Agreement for Lease.

[48]In the circumstances, I decline to make a finding that the Claimant agreed to grant the Lease to Violet having been told that there was no difference between an assignment and novation. Indeed, I doubt that he was told any such thing. Even if I am wrong on the pleading issue, that makes no difference to my finding of fact.

[49]I am satisfied that the Claimant did inform Gary Porter that he was considering a deeper basement than the 4 metres in the then existing planning permission in order to accommodate a mezzanine within the space. A Mr Benjamin Tobin of Stretton’s emailed Mr Gary Porter on 28January 2015 to this effect. He recorded that Mr Porter had orally agreed that Mr Azam was at liberty to make a separate planning application for this change between exchange and completion and that any such change would be at Mr Azam’s cost.

[50]I am also satisfied that Mr Azam did agree to pay Violet the sum of £315,229 plus VAT in the event the basement deepening works were carried out. This had been agreed by 8 March 2018 as recorded in an email from the Claimant’s solicitors to Gelbergs. Further, on 10 July 2019, Mr Azam agreed to pay £434,584.33 plus VAT. The latter sum was conditional on Mr Azam being provided with a completion date for the development. The process or procedure for Landlord’s Works as set out in the Lease was not followed. Neither party took the necessary formal steps. Nevertheless, an agreement was reached as to the deepening of the basement. Violet provided Mr Azam with a quotation, albeit after the works had started, at least on Phase 1. Mr Azam accepted that quotation. Thereafter, there was no provision in the Lease for Violet to seek a higher sum from Mr Azam if the costs of the deeper basement exceeded the price agreed. The risk was Violet’s. Given this, Violet had no right to seek a higher payment from Mr Azam. Further, the increased quotation or invoice was sent to Mr Azam after the structural works for the deeper basement had been completed. By July 2020 the superstructure of Block B was underway. It was too late to abandon the deeper basement. Mr Azam was entitled, in my view, either to refuse to pay more than had been agreed or to agree to pay a higher sum under any conditions he chose to impose. Violet did not comply with the condition imposed by Mr Azam – a reasonable condition in light of the delays in the construction. It seems to me, therefore, that Mr Azam is obliged to pay only £315,229 plus VAT in respect of the deeper basement as that was the only sum that had been unconditionally agreed between the parties.

[51]I have not been taken to any correspondence in which Mr Porter agreed that Violet owed or was liable for the £500,000 liability in the Agreement for Lease against which the additional costs the deeper basement could be set off. In the email of 8 March 2018, Mr Azam’s solicitors assert that Mr Azam “recalls agreeing with Mr Porter that this sum would simply be offset against the £500,000 that is owed to our client”. There is no mention of £500,000 or set-off in the email of 10 July 2019. In the circumstances, I am not satisfied that there was any agreement between the parties that the costs of deepening the basement would be set-off against the sum owed by Kingport under the terms of the Agreement for Lease. In his witness statement, Mr Azam states that he “suggested” that the costs of the Landlord’s Works would be setoff against the £500,000. He does not say that Gary Porter agreed. Indeed, I am satisfied on the basis of the contemporaneous documentary evidence that Violet consistently refused to undertake Kingport’s obligation when refusing to accept any amendment to the Lease or to enter into a separate written agreement or security for that sum. Mr Azam’s solicitor’s instincts were correct in seeking a written agreement to that effect before granting the Lease but Violet did not engage.

[52]I am not satisfied that Mr Azam had a fixed intention to let out the commercial premises from 2014. His own written evidence contradicts this. In paragraph 16 of his witness statement he says that he “wanted to use the commercial and basement space for my business or let it out either to a business or to use it for car parking”. At paragraph 20 he says “At the time of selling the lease to Violet Developments I did still think I would bring the business to Violet Road and had been thinking about changing the plans….”. At paragraph 27, in relation to discussions of revised plans in July 2016, Mr Azam says “ I was unhappy about these plans, which ……. would be detrimental to me finding a tenant or taking occupation for my business”. In his oral evidence Mr Azam said that he was still thinking of moving his clothing manufacturing back to the commercial premises in 2017. He attributes that to his inability to get a completion date from Violet. I am satisfied that Mr Azam had a fixed intention to let out the commercial premises by late 2017. He had agreed Heads of Terms (“HoT”) for a letting of the basement by 10 January 2018 with the Gym Group. The HoT provided for a three-month exclusivity period and the agreement for a long-stop date for the grant of a Lease. An annual headline rent of £149,212 was agreed for a 15-year lease with a 12-month rent-free period. On balance of probabilities, I am satisfied that those HoT did not progress because of the lack of a completion date for the development.

[53]Mr Azam and the Gym Group continued to discuss the grant of a lease of the basement as is evidenced by revised HoT being put forward in September 2021 at a headline rent of £189,000 per annum with a 14-month rent-free period. The Gym Group would bear responsibility for obtaining planning permission for a change of use. Overall the evidence, including that of the valuation experts, is that the change of use process would not take longer than 6 months. Mr Azam also had discussions with ASDA about letting the ground floor. There is no evidence that Mr Azam was still considering taking his manufacturing back to Violet Road after January 2018.

[54]On balance of probabilities, I am satisfied that the reason The Gym Group lost interest was because they obtained a lease of other premises in the area. That is Mr Azam’s evidence (WS [54]). I do not know when that happened but it seems likely, given the long period over which it maintained its interest in Violet Road, that The Gym Group would have entered into a lease of the basement had there been a realistic completion date. The terms of that lease are another matter as HoT do not equate to the entry into of a lease.

[55]I am satisfied that the commercial premises had not been completed in accordance with the Lease and planning permission at the time the PCC was issued. The PCC was issued on the basis that the specification for the commercial premises was altered to completion as a shell and not as shell and core. The planning permission and Lease required completion to core and shell. Mr Neave’s evidence makes it clear that further works are necessary to fulfil the requirements of the Lease/planning permission including the non-material amendment of 2017. Those works include completion of tanking in the basement, insertion of glass walls/windows to the basement level, provision of a ‘soft spot’ for a goods or car lift and an operating lift, being the one already in situ.

[56]I am satisfied that Mr Azam did not agree to the construction of the basement without either a ramp or, at least, a soft spot for a lift. His evidence is clear and consistent on that point. Further, the contemporaneous documentary evidence shows that he agreed that the original car ramp could be replaced by a car/goods lift/soft spot. There is no evidence that he agreed to completion of the commercial premises without one or the other. The Issues i). What is the proper construction of the obligation in paragraph 5.2.4 of Schedule 5 of theLease? Was it engaged at all in the circumstances of the case?

[57]The relevant parts of schedule 5 to the Lease are as follows: “5.1.1."Approved Consents" - the Existing Scheme or the scheme with a larger residential component approved by Final Determination 5.1.4 “Date of Determination” - the date on which the conditions for a Final Determination have been satisfied 5.1.6. "the Existing Scheme" - the scheme for redevelopment of the Premises previously approved by planning consent No PA/12/02494 dated 15th August 2013 5.1.7 “Final Determination” means a decision on the application by the local planning authority which is accepted as final by the Tenant or which is given on Appeal and in the case of the grant of consent also on which the normal time limit for an application for Judicial Review has expired provided that nothing in this sub-clause imposes any obligation upon the Tenant to appeal or seek judicial review of any decision 5.1.10 “the Prior Applications” - any Planning Application in respect of development at the Premises submitted to the local planning authority before and without Final Determination at the date of this lease provided that both parties warrant to the other that they have disclosed all applications of which they are aware to the other 5.1.12. "the Works" - the building and other works required to redevelop the Premises in accordance with the Approved Consents including (if consent for them has been granted) the Landlord's Works 5.2.1 The Tenant will use reasonable care and the all reasonable endeavors [sic] to obtain on the Prior Applications with reasonable speed consent or consents for the maximum increase in the residential component of the scheme which can reasonably be obtained as agreed between the Landlord and Tenant acting reasonably and in the absence of agreement as determined in accordance with the provisions of paragraph 5.8 of this schedule 5.2.4. The Tenant will carry out the Works and use all reasonable endevours [sic] to reach Practical Completion within two years of the date of Final Determination’ 5.2.5.4. once the Works have commenced, the Tenant shall proceed to carry out and complete the Works as soon as reasonably practicable subject to disruption, delay, postponement or modification to the programme for such works resulting from force majeure or other cause or circumstance beyond the control of the Tenant (the Tenant using all reasonable endeavors (sic) to minimize the period of such disruption, delay, postponement or modification)” [sic] to reach Practical Completion within two years of the date of Final Determination’

[58]Mr Holland submits that paragraphs 5.2.4 and 5.2.5.4 are both applicable to the determination of the timeframe for the completion of the development notwithstanding the reference to “Final Determination” in paragraph 5.2.4. He says paragraph 5.2.4 sets out a long-stop date for completion either of the Existing Scheme or of any other amendment to the Existing Scheme for which an application had been made prior to the execution of the Lease i.e., a Prior Application. As there was no Prior Application to increase the size of the residential part of the development, the parties must have intended that the obligation was to use all reasonable endeavours to complete the Existing Scheme within two years of approval of any prior application including one for a non-material amendment otherwise the clause has no meaning. There was an application of that sort extant as at the date of the Lease, being one made on 23 April 2013, which related to a clause in the s.106 agreement. He submits that the application was not finally determined until 23 September 2016 when the planning authority wrote stating:

“I refer to the above application which was received to the Council [sic] on 23/04/2013. Given the time that has lapsed I am treating your application as “finally disposed of” under article 40(13) of the above Order. This is because the period for making a decision on this application has expired, and no appeal has been made to the Secretary of State.”

The “above Order” was The Town and Country Planning (Development Management Procedure)(England) Order 2015 (“the 2015 Order”) which sets out, at article 40(13), the requirements for final disposal of an application. It follows that the time for completion of the development was 23 September 2018, subject to force majeure etc.. Alternatively, Mr Holland submits that there is a clear mistake in the drafting of the Lease and I can correct that error by adding the words “or from the date on which the existing scheme can be implemented” to the end of paragraph 5.2.4. The mistake is the failure to give effect to the parties’ obvious intention which was to complete the development within 2 years from the date when Violet had a planning permission it could implement without risk of subsequent challenge.

[59]Mr Hutchings submits that paragraphs 5.2.4 and 5.2.5.4 are directed at two quite different scenarios. The first, 5.2.4, applies where a subsequent, post-Lease, application is made by Violet. This is so because it cannot relate to applications made prior to the Lease by the Landlord as there were no such applications. That “Final Determination” related to such a subsequent application is supported by paragraphs 5.6.1 and 5.6.4 of Schedule 5 which require Violet to give Mr Azam details of any Final Determination so that the ‘overage’ due to Mr Azam in relation to any relevant additional flat may be calculated. Mr Hutchings says paragraph 5.2.5.4 is the only applicable provision in the circumstances because it requires completion of the “Works” as soon as reasonably practical etc. after “the Works” have commenced. “the Works” refers to the Existing Scheme or to any works in accordance with the “Approved Consents”. The latter referred only to the Existing Scheme or a scheme with a larger residential element. A larger scheme was never approved therefore 5.2.4.5 applies only to the Existing Scheme.

[60]Mr Hutchings submits that there was no extant prior Application because that made on 23 April 2013 had been deemed to be determined eight weeks and six months after the application was received. Regulation 6(2) of the Town and Country Planning (Modification and Discharge of Planning Obligations) Regulations 1992 (“the Regulations”) require the planning authority to determine an application within eight weeks of receipt. If it refuses the application or fails to determine it within eight weeks, a right of appeal arises (Regulation 7of the Regulations). The time for appealing is six months. In this case, no decision was made within 8 weeks therefore the time for appealing expired in or around December 2013, well before the Lease was executed. Accordingly, there was no extant application at the date of Lease and the letter of 23 April 2016 does not alter that position.

[61]In my judgment, Mr Hutchings is correct. The two paragraphs are directed at two different eventualities. “Final Determination” as used in paragraph 5.2.4 relates to the determination of an application made after the date of the Lease. In theory, it could have applied to an extant undetermined application at the date of the Lease but no such application existed. This is a perfectly sensible construction giving meaning to paragraph 5.2.4 and is consistent with the way the term “Final Determination” is used in paragraph 5.6. Indeed, it seems that Violet intended, for a significant time post-Lease to apply to increase the residential element of the development. If that had happened, it may well have required an extension of time beyond that set in paragraph 5.2.5.4. There is no need to read in the words suggested by Mr Holland because, where there is no application to extend the scheme, paragraph 5.2.5.4 provides a time-frame for completion of the development – as soon as reasonably practicable once the Works have commenced. It seems to me that the start of the period for completion may be different in each case for good reason. In the case of an expanded scheme, particularly where the application is made post-Lease, one might expect the tenant to have taken necessary steps to commence the works or even to have already commenced by way of demolition and digging out or construction of foundations. The result is that a fixed, extended time for completion would be realistic and reasonable. Where works are to be carried out in accordance with extant planning permission as at the date of the Lease, a fixed two-year period may be less reasonable as the tenant, Violet, may well have needed to take steps once it had possession, before the Works could commence. Given the existence of paragraph 5.2.5.4, there is, in my judgment, no obvious drafting error and no need to rectify the Lease or to read in words to give effect to the parties’ intentions, they had quite clearly made provision for what they intended in different eventualities.

[62]I agree with Mr Hutchings that the application made in 2013 had been determined well before the date of the Lease pursuant to the Regulations as set out above. The letter of 23 April 2016 was merely recording that historic determination. If the planning authority had been purporting to determine the application in 2016, it would have had no power to do so as it was functus. However, I am satisfied that it was not purporting to do so and was merely updating its register of applications in accordance with the 2015 Order.

[63]In the circumstances of the case, there is no provision in the Lease requiring the Works to be carried out within either 2 years from 15 December 2015 or 2 years of demolition. ii). Did Violet breach the obligation to use “all reasonable endeavours” in paragraph 5.2.4 ofSchedule 5?

[64]In light of my decision on the first issue, this question does not arise. Paragraph 5.2.4 does not apply in the circumstances of this case. In any event, paragraph 5.2.4 uses the phrase “all reasonable endevours” [sic]. Indeed, the whole of paragraph 5.2 uses the word “reasonable” in relation to the carrying out of “the Works”. Paragraph 5.3.4 uses the phrase “best endeavours”. It seems to me that where different words or phrases are used in different parts of a professionally drafted document, they are intended to have different meanings otherwise, why use different words? In the latter case the obligation applies to very specific works – the Landlord’s works – for which the landlord is paying. A higher standard is imposed in such different circumstances. Were it relevant, I would find that the term “all reasonable endevours” [sic] in paragraph 5.4.4 should not be construed as “best endeavours”. iii). Did D1 materially breach the obligation in paragraph 5.2.5.1 by reference to the followingmatters: (a) numerous areas of damaged plasterboard in the building which had been partiallyconstructed at the Premises,(b) plasterboard in that building had been left installed for toolong in exposed conditions, resulting in damage and mould growth on that plasterboard, (c)sections of plasterboard had been removed from the building constructed at the premises dueto being too wet, (d) metal studwork forming part of the building constructed at the premiseswas damaged

[65]This issue does not hold the same importance as originally because the Defendants and EEH have admitted a different material breach justifying forfeiture. Nevertheless, the point is being pursued therefore I must deal with it.

[66]Paragraph 5.2.5.1 required Violet to carry out the Works – “in a good and workmanlike manner in accordance with high class standards usually applied by persons skilled in the relevant trade in the execution of such works”.

[67]It is common ground that there was damaged plasterboard and metal studwork in the partially constructed building and that this was a breach of paragraph 5.2.5.1. This was due, primarily, to the fact that the plasterboard went up before the building was watertight and there was delay in weatherproofing the building. The dispute concerns the materiality of the breach.

[68]Mr Neave told me that such incidents, while not ideal are not uncommon and are typically rectified during the works. The damaged board and studwork was replaced once the building was watertight. The issues were rectified as there is no sign of them now. There is no evidence that this issue caused any delay or, by or in themselves, adversely affected the quality of the build. The residential flats have been completed to a “very good standard” and “to a high quality” while the commercial premises, save for the incomplete works, have been completed to “an acceptable level of quality” for a shell and core finish. Further, I agree with Mr Hutchings that this clause cannot require absolute perfection. There are bound to be some mistakes made in a development of this kind. In the light of Mr Neave’s evidence, these issues were relatively minor and I am satisfied, did not constitute material breaches of paragraph 5.2.5.1. iv). Did the Claimant waive his right to forfeit in relation to antecedent breaches byunequivocally acknowledging the continued existence of the lease with knowledge of thebreaches in any or all of the following communications:(a) his solicitors’ letter of 25November 2021,

(b) his solicitors e-mail of 9 February 2021,

(d) his solicitor's letter of 12 September 2018.

[69]In 2020, the Claimant commissioned a report from the Cumming Group (“the Cumming report”). The brief was to report on progress of the development. The authors visited the site on 29 July 2020, 21 October 2020 and 13 May 2021. Reference is made to the failure to meet an inadequate, revised timetable prepared by Violet dated 10 July 2020 in the light of the impact of Covid-19. By then the effects of Brexit had also had an impact. The authors noted that some of the works in the revised timetable had not even been started by the dates on which they should have been completed in accordance with the July 2020 timetable. In my judgment, it is clear from that report that the development had not progressed in a timely manner. During the hearing in response to a query from me, Mr Holland told me that the Claimant’s solicitors had received the Cumming report in early November 2021. The 74. result of this seemed, at the time, to be an acceptance of waiver of the right to forfeit in relation to paragraphs 5.2.4 and 5.2.5.4 if a breach of them constituted a once and for all breach as opposed to a continuing breach. The Claimant’s solicitors wrote to Violet’s solicitors on 25 November 2021 saying “Our client has received interest from a couple of companies who are interested in taking lettings of the commercial space. Unless he is able to proceed soon, the prospective tenants are likely to look elsewhere. Our client needs to understand when the works at the Premises will be complete, and when your client will be in a position to complete the leaseback of the Commercial Space.”

[70]The issues are whether the Claimant had knowledge of the failure to complete the development “as soon as reasonably practicable” and whether the letter of 25 November 2021 was an unequivocal act that recognised the continuation of the Lease. Mr Holland submits that no question was put to the Claimant about his knowledge of the contents of the Cumming report or a failure to complete the development within a reasonable time therefore the Defendants cannot prove the requisite knowledge of breach. I have difficulty with this submission in light of my understanding of Mr Holland’s position once the date of receipt of the Cumming report was known. Further, in my judgment, it is unlikely that Forsters failed to send the Claimant the report or to discuss it with him. I infer that, as a matter of fact, they both sent the report to Mr Azam and discussed its contents with him. It was a significant document at the time providing Mr Azam with an independent overview of the development. It is inherently unlikely that he did not receive the report or that he did not know of its contents. Further, albeit in relation to an earlier period, in his oral evidence, Mr Azam told me that as at 23 November 2020 (the date of a letter from his solicitors to Violet’s solicitors) he was “aware that Violet had not completed the build as soon as reasonably practicable”. He added that often, there was no-one working on site. The fact that this knowledge related to the service of an earlier s.146 notice which was accepted as being faulty does not alter the position as to knowledge of the failure to complete as soon as reasonably practical. Mr Azam did not lose this knowledge over the following year. In light of this evidence, I am satisfied that the Claimant had knowledge of Violet’s failure to complete the development as soon as reasonably practicable in both 2020 and in November 2021, prior to the letter of 25 November 2021. Although not relevant as I have found the breaches of paragraph 5.5.5.1 to be immaterial, Mr Azam also had knowledge of those breaches by reason of the photographs in the Cumming report. For the avoidance of doubt, I am also satisfied that the letter of 25 November 2021 did constitute an unequivocal act acknowledging the continuing existence of the Lease. A leaseback of the commercial premises to Mr Azam could only take place if the Lease was continuing. Accordingly, if the failure to complete the development as soon as reasonably practical constituted a once and for all breach, the right to forfeit for that breach was waived by the 25 November 2021 letter. v). What is the meaning of paragraph 5.2.5.4 of Schedule 5 of the Lease, including themeaning of “all reasonable endeavors[sic]”?

[71]Mr Holland submits that paragraphs 5.2.4 and 5.2.5.4 impose two separate obligations with different functions. The former was intended to provide a finite end date which triggered the Claimant’s obligation to take the commercial lease. He says that paragraph 5.2.4 was intended to be a once and for all obligation which arose on the specified date. The words used in 5.2.4 were “to use all reasonable endeavors [sic] to reach practical completion”. By comparison, the words in 5.2.5.4 were “to carry out and complete” the works. “Carry out” is an ongoing obligation until the works are completed: the words naturally import a continuing obligation. Further, “as soon as reasonably practicable” is a moving target but one that may be determined in light of the circumstances of the particular case. It is an ongoing obligation because it addresses the situation where Practical Completion has been reached but the works to the commercial premises are incomplete. A continuing obligation is consistent with the other obligations in paragraph 5.2.5.

[72]I do not accept Mr Holland’s submissions as to the nature of paragraph 5.2.5.4 in relation to whether it creates a once and for all obligation or a continuing obligation. As I have already determined, paragraphs 5.2.4 and 5.2.5.4 address two separate eventualities, the first of which does not arise in the circumstances of this case. 5.2.4 is concerned with the situation if a planning application had been made to increase the number of residential flats. 5.2.5.4 is concerned with the situation where no such application was made and the development is built in accordance with the planning permission as at the date of the Lease. When one considers paragraph 5.2.5.4 on its own, in my judgment it is plainly a once and for all obligation to complete the development “as soon as reasonably practicable”.

[73]Without deciding the point, for argument’s sake I accept the proposition that prior to an ascertained date for completing the Works, the requirement to carry them out may be an ongoing obligation. However, once the date for completion has been determined, the failure to complete by that date is a once and for all breach of the whole paragraph. That is what the Court of Appeal held in First Penthouse. The precise date for completion does not need to be set at the outset but it must be calculable by reference to any variations or clauses in the Lease. The date for completion may be calculated objectively by excluding delays attributable to force majeure and other matters outside Violet’s control. Indeed, that is the point of the delay experts. Mr Azam needs a fixed date in order to calculate the rental income he says he has lost.

Claimant’s solicitors had received the Cumming report in early November 2021. The

[74]Mr Holland’s argument that “carry out” imports an ongoing obligation does not help in distinguishing 5.2.4 from 5.2.5.4, as he seeks to do because those words also feature in 5.2.4. The words “and complete” seem to me to impose the same obligation as “to reach Practical Completion” which, in this context, means ‘to complete’. The use of the words “all reasonable endevours” imports allowances for delays beyond Violet’s control therefore even the two-year timeframe was not immutable, it too was subject to an extension attributable to delays beyond Violet’s control. “All reasonable endevours” does not impose a guarantee but an obligation to take all reasonable steps, as Mr Hutchings submitted. For example, if there had been a successful application to extend the number of residential flats such that 5.2.4 was applicable, but a sink hole had opened up in Violet Road causing complete suspension of all works for a year, the date for Practical Completion in 5.2.4 would have to have been extended beyond two years. In my view, the fact that other parts of paragraph 5.2.5 may contain ongoing obligations does not assist when the nature of the other obligations is aimed at a different objective, being quality of build rather than timescale. I do, however, agree with Mr Holland that the debate is arid because I have decided that the conditions imposed for relief from forfeiture may extend beyond the breaches relied on in the s.146 notice.

[75]For the reasons already given, I am not satisfied that the words ‘all reasonable endeavours’ should be construed as ‘best endeavours’ considering the Lease as a whole.

[76]I agree that once a delay has been established, it is for Violet to prove that the cause was a matter beyond its control and that it used all reasonable endeavours to minimise the delay. I do not understand Mr Hutchings to be arguing the contrary.

[77]I do not agree with Mr Hutchings that the timescale for completion is calculated from the date construction commences rather than the date of demolition. The requirement is to carry out and complete “once the Works have commenced”. “The Works” means “the building and other works required to redevelop the Premises in accordance with the Approved Consents including (if consent for them has been granted) the Landlord's Works (my emphasis). Demolition is clearly part of the “works required to redevelop the Premises”. One cannot construct unless the existing building has been demolished. The extent of the culpable delay falls under the next issue. Demolition is the starting point adopted by Mr Holland and I agree. vi). Was Violet in breach of paragraph 5.2.5.4 of Schedule 5 of the Lease in that it had notcompleted the Works “as soon as reasonably practicable” as at the date of service of the s.146notice on 16 December 2021?

[78]The Defendants quite properly accept that the development was not completed in accordance with paragraph 5.2.5.4 in light of the delay expert’s evidence. This is not relevant to forfeiture but is relevant to the conditions on which relief may be granted. vii). For each of the following events,(a) did it constitute “force majeure” or other causeor circumstance beyond Violet’s control;

(b) did it cause disruption, delay, postponement ormodification to the programme for the Works and/or

(c) did Violet use “all reasonableendeavors [sic]” to minimise the disruption, delay, postponement or modification to theWorks caused by that matter or event? a) the incursion by travellers in March 2016 the necessity to obtain a Court order for their removal which was achieved on 10 July 2016 and consequent removal of rubbish; b) the preparation and filing of a demolition notice on 29th July 2016 and the demolition of the existing building between 10th August and 5th September 2016; c) the need to reroute HV electricity cables serving a substantial part of London which it was not possible to divert in the manner originally envisaged by the parties at the time when the lease was entered into; d) the presence of an unidentified 600 mm utility pipe running the length of the site and passing through the area of the proposed basement of the existing scheme and of which there was no record; e) difficult ground conditions arising from an unexpectedly high water table, a problem arising principally as a result of increasing the depth of the basement at the Claimant's request; f) the need to carry out or remediation works to boundary piles contiguous with Violet Road by reason of the ground conditions and the partial collapse of Violet Road; g) the need to redesign the exterior due to changes in construction regulations resulting from the Grenfell tower tragedy; h) the need to redesign the basement pump chambers to accommodate changes in pump specification; i) the COVID-19 pandemic which necessitated closure of the site for over 3 weeks and subsequent strict control measures on site requiring the reduction of labour and observance of strict social distancing rules and caused delays in sourcing materials; j) the impact of Brexit on the availability of labour and materials.

[79]It seems to me that I have to consider whether each of the events pleaded constituted a delay beyond Violet’s control and, if it was such an event, did Violet comply with the obligation to minimise any such delay. In my judgment that is the meaning of paragraph 5.2.5.4. While the Amended Defence and Counterclaim accepts that “to an extent [the first Defendant], breached paragraph 5.2.5.4 of Schedule 5 to the Lease, in that it did not proceed to carry out and complete the works as soon as reasonably practicable and that it did not use all reasonable endeavours to minimise the periods of disruption, delay, postponement or modification” I still have to determine what that extent was and identify any causes of delay about which it could do nothing. Indeed, this is the basis on which all parties have proceeded, particularly by reference to the expert evidence on delay. I do not accept that because the First Defendant acknowledged that it had some fault in relation to delay, it follows that all delay, whatever the cause, is laid at their door as appears to be the Claimant’s primary case.

[80]It is common ground that all these matters caused delay. The question for me is to what extent the delay caused by each matter was beyond the First Defendant’s control and whether it took all reasonable steps to mitigate or reduce any such delay. There is very little contemporaneous evidence available. While Mr Azam is the only person involved throughout, he has relatively little knowledge of the nuts and bolts of the construction. His memory is not entirely accurate and he is, to a large degree, reliant on the documents available to refresh his memory.

[81]The delay experts, Mr Moreira and Mr Gouldby were handicapped by the lack of contemporaneous documents meaning they had to reconstruct what was likely to have happened from the documents that are available. During oral evidence, each accepted, one way or another, that their conclusions were, to an extent, educated guesswork which explains the great difference in their conclusions. Unhelpfully, they were given different instructions. Mr Gouldby was asked to consider the issues on the basis that the two years to complete the works started on 22 September 2016 the date on which the modification plan for the ground floor and basement was finally determined. Mr Moreira was asked to opine on how long a reasonably competent developer would take to complete the project ignoring the effect, if any, of the pleaded causes of delay.

[82]Very helpfully, the experts agreed that the appropriate methodology for the analysis of delay in this case is to use a retrospective method and “as planned versus as built” analysis. They also agree that it is appropriate to break the analysis into 10 different windows or phases of work. They agree that the most appropriate baseline programme of works is the PDF produced by the first Defendant in 2015 notwithstanding the inadequacies of that document of which they were highly critical. That plan envisaged completion of the building by July 2018, 19.5 months after construction commenced on 28 November 2016. The experts agree that the plan was unrealistic in that it failed to make any allowance for critical steps such as commissioning, inadequate time for UKPN works and the other matters set out in their joint statement [D1/261]. They also agree that, at the time it was produced, it was possible to complete the planned works within the planned two-year period. All being well, the development would have taken about 94 weeks.

[83]The experts also agree that it is necessary for them to rely on broadly the same set of documents being i) the contemporaneous program updates where available, ii) the monitoring surveyor reports produced initially by Capita and subsequently by Dalbergia, iii) the contemporaneous correspondence disclosed and iv) the pleadings and witness statements. In relation to documents, both experts have noted the dearth of contemporaneous documents in this case. There are no progress reports produced by the developer, not even informal reports by way of emails or other correspondence. There is a lack of contractual documentation and even purchase and payment documentation. This has made the experts’ and my tasks much more difficult. Mr Gouldby produced a very useful table setting out the 10 windows or phases of construction and the differences between the experts. The experts have not limited their approach to the matters set out in the pleadings or set out their conclusions exclusively by reference to those issues. Rather, between them, they have agreed the contents of that table setting out, for each window, the areas in which they agree, the areas in which there is partial agreement and the areas in which they wholly disagree together with brief reasons. However, the differences between the approach of the experts and the way the issues I must address have been formulated means I must, on occasion, consider the experts’ evidence across more than one window of time when dealing with each of the issues.

[84]Mr Moreira opines that the build should have been completed by November 2020 while Mr Gouldby says March 2022.

[85]I wish to record my gratitude to the experts for the additional work each put in. The incursion by travellers in March 2016, the necessity to obtain a Court order for their removal which was achieved on 10 July 2016 and consequent or rubbish or removal

[86]Mr Gouldby did not consider this stage of the development in his report. It comprised the period between completion of the Lease and the start of construction on 28 November 2016. The experts called it ‘window 0’. They agree that demolition was expected to commence in mid-April 2016 and note that a delay was caused by occupation by trespassers. Neither can explain the delay in commencing construction works between demolition and the date construction did start.

[87]It is impossible for me to find that the incursion of travellers was an event beyond Violet’s control in a vacuum of evidence. An incursion by trespassers is a reasonably foreseeable event when there is an empty property. The real question was whether the first Defendant had done everything reasonably possible to prevent such an incursion. There is no evidence as to what steps it took. In any event, I am satisfied, on balance of probabilities, that the incursion of travellers on or around 9 March 2016 did not cause any delay to the project. The documentary evidence (court applications, witness statement and court order) establishes that the travellers had left on 20 March 2016. There is no evidence of any subsequent incursion.

[88]In saying this, I note that Ross Porter asserts in his unverified account of the course of the project that the travellers did not leave until 10 July 2016 and he refers to an email and photograph. I have not seen the email, as far as I am aware. There are four photographs in bundle I dated 15 July 2016 showing parts of fences and locks. There is no evidence tying the broken lock to a subsequent incursion by trespassers or as to the date on which such an incursion might have occurred. If there was a second incursion, there is no evidence that Violet had to return to court or that there was a further delay as a result. I can put little weight on Ross Porter’s account given what is recorded on the face of the court order of 30 March 2016 and the lack of any other corroborating evidence. As to mitigating the delay, there is no explanation as to why it would take the first Defendant over four months to remove the trespassers and any residual rubbish or why this could not have been dealt with concurrently with the other steps being taken in April, May and June 2016, which I address below. The preparation and filing of a demolition notice on 29th July 2016 and the demolition of the existing building between 10th August and 5th September 2016

[89]Window 0 - The evidence establishes that, notwithstanding an initial plan to demolish in mid-April, no geoenvironmental report was commissioned until April 2016. That report was necessary to obtain the discharge of pre-commencement planning conditions. The report was provided very quickly, within 3 or 4 weeks of commission. The application to the planning authority to discharge the said conditions was made promptly and demolition commenced the day after the final condition was discharged. The discharge of the conditions took 3 months (3 May to 9 August 2016) not 4 months, as asserted by Mr Moreira. He says that, in his experience, this should only have taken 8 weeks. It is not clear to me why, when the application to discharge the pre-commencement conditions in fact took a shade over 3 months, and the decision making was in the hands of a third party, the local authority, the first Defendant is responsible for the additional 4 to 5 weeks delay or what it could have done to speed the process or reduce/mitigate the delay. These matters do not constitute force majeure, they are integral to a development of this nature. There is no explanation as to why the geoenvironmental report was not commissioned until April 2016 as opposed to, say, January or February 2016. However, the internal processes of the local authority were beyond the First Defendant’s control.

[90]Further delay is attributable to a dispute with the Claimant as to the plans as Mr Moreira opines. The Claimant was insisting on adherence to earlier architectural plans which had not been approved by the Local Authority rather than the structural plans that had received approval. Mr Moreira attributes a post-demolition delay of 12 weeks to this dispute which was caused by Mr Azam. This does not fall, strictly, within the period ending with demolition but, as it is the basis on which the delay argument was fought, it seems to me to be relevant.

[91]I am satisfied that a period of 26 weeks was required prior to demolition and commencement of construction to carry out the preparation pleaded in paragraph 9 of the amended defence and counterclaim of the first Defendant. I base this on the time necessary to request and obtain a geoenvironmental preliminary report (3 weeks), the required application to the local authority to discharge pre-conditions (14 weeks) and finalisation of the structural design. The latter appears to have been finalised on or around 13 July 2016 according to Mr Moreira and he does not suggest that this work could or should have been completed earlier. In my judgment these matters do not constitute a culpable or unmitigated delay in carrying out the Works. The additional delay in demolition is attributable to Violet and there is no evidence to support any mitigation. However, I cannot see how this affected the timetable of the development because further delay of 12 weeks post demolition is attributable, per Mr Moreira, to Mr Azam’s refusal to accept the structural plans. Mr Moreira attributes a further 12 weeks of delay post demolition to this factor which was beyond Violet’s control. Mr Azam in fact began challenging the approved plans in July 2016 therefore, even if demolition had taken place shortly thereafter, construction could not have started.

[92]For these reasons, it seems to me that the delay in commencing construction was attributable to Mr Azam’s position on the design and I cannot see that Violet could have done anything to reduce or mitigate the consequent delay. The need to reroute HV electricity cables serving a substantial part of London which it was not possible to divert in the manner originally envisaged by the parties at the time when the lease was entered into

[93]Window 2 - The experts agree that the rerouting of the HV cables was beyond the control of Violet because the work was entirely within the hands of a third party, UKPN, and there was nothing Violet could do to reduce the delay. This prevented the excavation of the land under Phase 2 of the development. The experts also agree that the delay attributable to this work was 55.5 weeks and I accept that evidence. The presence of an unidentified 600 mm utility pipe running the length of the site and passing through the area of the proposed basement of the existing scheme and of which there was no record

[94]Window 2 - This concerns a pipe of unknown origin which was discovered 3 metres below the surface when excavation for Phase 2 began. The experts agree that this discovery caused a delay of 9.5 weeks. Mr Moreira initially opined that the entirety of the delay is attributable to Violet because it failed to take any or any reasonable steps to investigate what lay under the soil following demolition. In his view, Violet could and should have carried out a ground penetration radar survey of the land. Mr Gouldby agrees that such a survey should have been carried out after demolition. He also accepted that it is more likely than not that the pipe would have been identified by such a survey. Both experts agree that it is not possible to say to what the postdiscovery delay is attributable because of the lack of documentation. Mr Gouldby attributes 2 weeks of the delay to matters beyond Violet’s control because that time would have been required to remove the pipe in any event. In his oral evidence, Mr Moreira accepted that some time would have been required to remove the pipe and backfill. He accepted removal etc could have taken 1 or 1.5 weeks and speculated that Violet might have been able to remove the pipe during excavation for Block A. The delay was foreseeable because unidentified pipes are not unusual. The problem is, it is not known where the pipe was or whether removal works could have been carried out with UKPN’s consent.

[95]Given the lack of evidence, it is impossible for me to decide where the pipe was, what its proximity to the HV cables was or determine whether it could have been dug out in advance. It is for Violet to prove that it took all reasonable steps to avoid or mitigate the delay and it has failed to do so. Nonetheless, it seems to me that even on Mr Moreira’s evidence, there would have been a delay. In the circumstances, I attribute 2 weeks of delay to matters beyond Violet’s control and the balance of 7 weeks to Violet. Difficult ground conditions arising from an unexpectedly high water table, a problem arising principally as a result of increasing the depth of the basement at the Claimant's request

[96]Window 1 - This issue arises in relation to both phases of the development. As to Phase 1 of the building, both experts agree that the delay is attributable to Mr Azam’s requirement that the basement be excavated to a deeper level than originally planned. They agree that this was an event beyond Violet’s control as it was a requirement imposed by Mr Azam. The delay caused by this was 8 (Mr Moreira) or 9 (Mr Gouldby) weeks in window 1. In fact, the difference between the experts was smaller because Mr Moreira had placed a further 1.5 weeks of delay attributable to this cause into window 2. It is agreed that there is nothing Violet could have done to mitigate or reduce this delay. Given the agreement of the experts, I accept that their evidence. As there is only a small difference between the experts, I attribute a non-culpable delay of 8.5 weeks to this cause.

[97]Window 3 - As to Phase 2 of the build, the experts agree that the delay caused was 12.5 (Mr Moreira) or 12 (Mr Gouldby) weeks. Mr Moreira says that the whole of the delay is attributable to Violet partly due to the breakdown of the excavator on three occasions by mid-March 2019 and partly because the balance of any delay is wholly unexplained. Mr Gouldby attributes six weeks of the delay to matters beyond Violet’s control and six weeks to Violet. He does this on the basis that the plant breakdown couldn’t possibly account for eight or 12 weeks of delay therefore there must have been another cause. There is simply no evidence to indicate what the cause might be. Mr Gouldby speculated that it might have been attributable to deeper piling being required due to the deeper basement required after June 2017. While he acknowledged that Violet was using an inadequate excavator at eight tons in midMarch 2019, he says there is no evidence that that had been the position since January 2018 and it is, in his view, highly unlikely that any contractor would have been using such a small excavator over two months or more.

[98]Phase 1 also faced difficult ground conditions and more water than expected but this did not cause any additional delay to those groundworks beyond the 8 weeks already mentioned. While there is some evidence that there were greater levels of groundwater in the excavation of Phase 2, there is also evidence that the level of inflow was equally as high during the excavation of Phase 1 [D1/486/7.19.8]. Further, it was known in April 2016 that there would be a moderate inflow of water at a depth of 4.5 metres. Mr Gouldby told me that suggested that water would be kneedeep at 4.5 metres and potentially deeper at 5 meters which is the depth of the dig required to accommodate a .5 meter basement slab. Mr Gouldby also told me a pump would have been required for that level of ground water. Prior to 2018, such a pump could have discharged groundwater into the sewers but the rules changed in 2018 therefore Violet would have needed to make alternative arrangements for the removal of the groundwater.

[99]Again, the problem here is a lack of evidence. In my judgment, it is highly unlikely that there was a requirement for deeper pilings on Phase 2 than for Phase 1 therefore there is no reason for any delay in excess of that caused to Phase 1. The evidence, being the April 2017 report prepared by Capita, shows that the original piling works for Phase 1 were completed to timetable. This suggests that either the pilings were deep enough to accommodate the additional basement depth or the added depth did not delay phase 1 beyond the 8.5 weeks referred to above. Mr Azam has no knowledge or paperwork relating to this issue. Violet did not produce progress reports which may have explained the delay. The onus is on Violet to produce documents or other evidence and if it does not I must infer that there is no evidence of any external cause of delay.

[100]I am not satisfied that Violet has proved that the delay was caused by either plant failure or deeper pilings or by deeper groundwater than expected beyond any delay to Phase 1 caused by the deeper excavation. Problematic groundwater was predicted in the April 2016 report. Mr Moreira allows a further 1.5 weeks for the additional depth of excavation although this may refer to the Phase 1 works which spilled over into window 2. However, in his oral evidence when dealing with Window 4, he said that he should have allowed more delay for the deeper basement but could not say how much more. Mr Gouldby allows 6 weeks but this is based on the fact that there must have been some explanation beyond plant failure. It seems to me that, on balance of probabilities, the extra depth of excavation required in Phase 2 would have caused some delay beyond Violet’s control as that is accepted by Mr Moreira. He accepted that the delay was more than the 1.5 weeks allowed in his report. The onus is on Violet to prove the cause of any delay was beyond their control and that the state of affairs could not have been avoided by taking reasonable steps. It is not sufficient to say that there must have been some non-culpable delay because the only matters relied upon could not have caused the full delay. Plant failure was a matter within Violet’s control I cannot see that the delay caused by the additional depth of basement in Phase 2 should have been very different to the delay to Phase 1 save that there would have been more time to mitigate the delay. I accept therefore, that there was some delay to the groundworks for Phase 2 which were beyond Violet’s control, being the additional depth required by Mr Azam. In the light of Mr Moreira’s concession that more time should be allowed, I accept Mr Gouldby’s assessment that the non-culpable delay was 6 weeks which is more in line with the delay in the excavation of Phase 1 for the same reason. There is no evidence that any other delay was attributable to matters beyond Violet’s control therefore I attribute the balance of the delay to Violet. The need to carry out remediation works to boundary piles contiguous with Violet Road by reason of the ground conditions and the partial collapse of Violet Road

[101]Window 4 - The experts agree that these matters caused between 31.5 (Mr Moreira) and 34 weeks of delay. I set the overall figure at 33 weeks of delay given the small difference. The issue is the degree to which the matters were foreseeable/within Violet’s control and the steps Violet took or could have taken to mitigate any delay. Mr Gouldby is of the view that the entirety of the delay was beyond Violet’s control. Mr Moreira is of the view that the appropriate figure is 2 to 2.5 weeks. There were three separate issues: firstly, the pilings in Phase 2 had significant water seepage which was destabilising the ground and caused the pilings to deflect and crack requiring resin injections by way of repair and integrity testing; secondly, the collapse of the road/footpath prevented access to the site; and, thirdly, there was persistently wet weather.

[102]The pilings were in place by the end of April 2019 and the excavation of Phase 2 was ongoing. At some point thereafter the ground became unstable and the pilings deflected. This was attributed to high levels of water seepage. Ground Injection Specialist (“GIS”) were retained to remedy the situation. Formosa was also consulting with bodies identified as Franki Foundations and London Guide Wall. There is no evidence that I have been shown that indicates when the initial discussions took place or when GIS was instructed and commenced work. However, they had plainly being carrying out remedial works to the pilings prior to 16 July 2019 because they had initially tried injecting quick-setting concrete between the pilings but it was being washed away as set out in an email of that date. It was recommended that Vshaped sheets of metal should be driven between the pilings and pressure grout inserted behind the pilings to seal the gaps. However, by 26 July 2019, GIS were concerned that the cause of the water ingress was something other than groundwater because the road had collapsed and, GIS thought, this may have damaged fresh or soil water pipes. GIS were also concerned that the levels of grout being absorbed behind the pilings may mean that fractured pipes were absorbing the grout and could be blocked. They wanted to halt remedial works to investigate. This was not a view shared by Formosa who replied stating that the high water inflow had been experienced since excavation of Phase 1 and tests carried out at the time indicated that the seepage related to groundwater and not to some external cause such as fractured clean or dirty water pipes. This had been established during the excavation works for Phase 1 [D1/486/7.19.8]. The difference, it appears, is that the water ingress appeared to be at a higher level than groundwater in 2019 by which I mean entering the site at a height above ground water level. Further, the fresh and soil water pipes were situated too far away to have been affected by the subsidence in the road. Having said that, the approach appeared to be working in that the grout was not being washed away as had been the quick-setting concrete. There is no evidence that further investigations were made and it appears that, at some point thereafter, the issue of water ingress was finally resolved by the construction of a temporary wall lining using poured concrete. This had been achieved by the end of September 2019.

[103]Essentially, Mr Moreira proceeds on the basis that there is no evidence that Violet took any steps to prevent or mitigate effects of ground water in Phase 2 although it knew that it was likely because of their experience with Phase 1. There is no evidence that Violet used ground sheeting or employed pumps, for example, therefore all the delay is attributable to it. Given that the water ingress persisted even after two attempts to prevent it and the water appeared to be coming from higher than groundwater level, it seems to me that even if the steps identified by Mr Moreira had been taken, they would not have resolved the issue although they may have reduced the delay caused thereby. In the absence of evidence, I cannot be satisfied that Violet acted promptly when the problem became apparent or took appropriate preventive measures. I am satisfied, on balance of probabilities, that Violet, at least by mid-June 2019, had taken appropriate steps to address the issue. It had consulted with specialists and then took the initial steps recommended by those specialists. I say mid-June because some time would have been required to consult with specialists and follow the initial advice in relation to quick-setting concrete, the failure of that course of action and the formulation of a second approach all of which had occurred by 16 July 2019. I am satisfied that the level of water ingress was beyond Violet’s control and not foreseeable given the failure of the steps they did take. Indeed, Mr Moreira implicitly accepts that the high levels of water ingress were beyond Violet’s control when he says in paragraph 4.3.75 of his report [D1/408] that if “the continuous flow of groundwater caused the subsidence which led to the road/footpath collapse outside the site, then, in my opinion, such subsidence was outside of Formosa’s control”. However, in the absence of evidence as to what happened between the end of April and mid-June 2019, I cannot be satisfied that Violet took all or any reasonable steps to minimise the delay during that period. As between the end of April and mid-June, I attribute the delay to Violet failing to take, or failing to evidence, appropriate actions to reduce delay. Thereafter, I am satisfied on the evidence that all reasonable steps were taken to address the issue and prevent further delay and find that 9 weeks of delay were beyond Violet’s control.

[104]Matters were aggravated by the collapse of the footpath beside the site. This appears to have started in or around August 2019 and continued until sometime in November 2019. Access to the site was restricted until the repairs were completed. The collapse in the road had occurred sometime before 26 July 2019 and contributed to the delay in the remedial works and to subsequent works from the end of September 2019. The delay thereafter is attributable to a dispute between Formosa/Violet and the local authority as to the cause of the collapse and the responsibility for paying for repairs. The issue is whether the piling works caused the collapse or the high levels of ground water washing away the subsoil. There is no direct evidence either way. Nor is there any evidence as to whether either Formosa or the local authority accepted responsibility for paying for the repairs. We do know that the local authority eventually undertook the repairs.

[105]There is no evidence that the excavation or pilings caused the collapse. There is evidence of a high flow of groundwater at above groundwater level which took three attempts to control even by specialists. It seems to me that, on that evidence, on balance of probabilities, the road/footpath collapse was caused by the flow of groundwater. Mr Moreira accepts that this was beyond Formosa/Violet’s control. No-one has suggested that there were any steps Formosa could or should have taken to mitigate the delay. Only the local authority could carry out the repairs and Formosa had no control of that. Mr Moreira asserts that the delay due to this cause was 2 weeks. However, Capita stated in their report of November 2019 that the delay attributable to the footpath/road collapse was 4-6 weeks. I am satisfied on the basis of the contemporaneous evidence that the non-culpable delay was 5 weeks, taking the mid-point of Capita’s estimate.

[106]Weather is beyond Violet’s control however, wet weather generally is foreseeable and can be planned for. Thirteen weeks of delay was caused by the weather in Mr Moreira’s opinion but he attributes this delay to Violet on grounds of foreseeability. Having said that, in his oral evidence Mr Moreira accepted that Capita reported in September and on 4 October 2019 that sustained wet weather had contributed to a delay. However, it seems to me that any delay caused by sustained wet weather in September has been accounted for in the delay in completing the piling works and excavation by 30 September 2019 therefore there is no further delay attributable solely or largely to the weather. The need to redesign the exterior due to changes in construction regulations resulting from the Grenfell tower tragedy

[107]Window 5 – The Grenfell Tower tragedy occurred in 2017. On or around 30 November 2018, new regulations were introduced banning combustible materials in buildings over 18 metres tall. As the development is 29 metres tall, the regulations affected it. A guidance document was produced in or around July/August 2019. Mr Moreira accepts that if the changes required as a result of Grenfell were not predicted in 2015 then they were beyond Violet’s control. He puts the consequent delay at 22 weeks. Mr Gouldby stated that Violet would have to await the guidance document. He was under the impression, because he was told in cross-examination that the guidance came out in January 2020. I have seen no evidence of that. Violet put in an application for a non-material amendment to its planning permission on 24 April 2020. That application included changes to the cladding to the external walls but it also included changes to the balconies to the flats. There is no explanation as to why the NMA application was not made until April 2020 when all regulations and guidance relevant to that application were available by August 2019. I note that it took the planning authority almost three months to grant the application. On the assumption that Violet would need time to assimilate the guidance and formulate its application it seems to me that a period of 19 weeks is a fair estimate of the delay caused by the changes to the building regulations, as suggested by Mr Moreira.

[108]I am satisfied that significant changes to building regulations in relation to cladding were not foreseeable in 2015 because they were a direct result of the Grenfell tragedy in 2017. For the same reason I am satisfied that any delay caused thereby was beyond Violet’s control. Given the fact that the planning authority took a little over 12 weeks to approve the application, I am satisfied that the change in building regulations caused a delay of 19 weeks allowing time to re-design and prepare the NMA. I am not persuaded that the Capita report of June 2020 indicates that no changes to cladding were required. Capita were commenting on the plan as then in place and do not appear to have addressed their minds to any changes that might be necessary as a result of Grenfell. Given the lack of communication by Violet, it is likely that Capita were not aware of the NMA. I note that Paul Keeping’s report of September/October 2021 refers to the change from cladding to brickwork as a change for appearance/marketing purposes. That report was produced c.18 months after the NMA was submitted and, I agree with Mr Moreira, it is highly unlikely that a developer, particularly one under the pressure Violet was facing, would change the design at that late stage purely for aesthetic purposes. It seems to me that the improved aesthetics were more likely to be a positive by-product than a driver for the NMA. In his oral evidence, Mr Moreira accepted that if changes were necessary to cladding then the delay was not foreseeable.

[109]I am not satisfied that the weather caused any additional specific delay that was beyond Violet’s control given the lack of evidence.

The need to redesign the basement pump chambers to accommodate changes in pump specification

[110]Window 8 - I assume this is the same issue raised by Mr Gouldby under windows 7 and 8 and is a reference to the substation, the design of which had to be approved by UKPN. Mr Moreira considered that it did not cause any delay because the delays in the internal fitting out were much greater during that period. Mr Gouldby attributed a non-culpable delay of 30 weeks to this issue on the basis that UKPN did not sign off on the design until 9 November 2021. However, he subsequently accepted that, to his knowledge, UKPN had never taken more than 2 years to approve a substation design which suggests that the design would have been submitted by November 2019 at the latest. However, Mr Gouldby also accepted that the design could have been submitted much earlier and the substation built at any time, well before November 2021. He knew of no reason why the design could not have been submitted at a much earlier date and the substation structure completed before it caused a critical delay. He accepted that the delay, therefore, was attributable to Violet.

[111]I am satisfied on the evidence that the delay in the building of the substation was not beyond Violet’s control. It was always known that a substation was necessary as it featured in the plans. The design of the substation could have been finalised and submitted to UKPN at any time after 20 July 2017, following the approval of the NMA which included moving the plant room to the basement from the ground floor. There is no evidence that Violet took any steps to progress the design or build to ensure that the construction of the substation did not delay the development. In the circumstances, I accept Mr Moreira’s figures for the overall delay. I agree that the causes of the delay he points to were matters within Violet’s control not least, because it has failed to adduce any evidence in relation to those matters. The COVID-19 pandemic which necessitated closure of the site for over 3 weeks and subsequent strict control measures on site requiring the reduction of labour and observance of strict social distancing rules and causing delays in sourcing materials

[112]Windows 6 & 7 - Both experts agree that the complete shutdown of all construction work for three weeks from c.20 March 2020 caused a delay of 3 weeks which was beyond Violet’s control and about which it could do nothing. Covid was not a foreseeable event. The issue is whether Covid caused any further delay. Mr Moreira says not while Mr Gouldby attributes a further 5 weeks delay to the impact of Covid in 2020. I prefer Mr Gouldby’s evidence on this issue for three reasons. Firstly, it is consistent with the contemporaneous assessment of Capita in its report of June 2020. Capita were on the ground at the time and were best placed to assess the immediate impact of Covid in the 3 months or so after lockdown. Secondly, Mr Gouldby was working in the United Kingdom during that period. Thirdly, Mr Moreira was not working in the United Kingdom. He told me he was working abroad 121. from 2019 and did not have personal experience of the impact of Covid on building projects in the United Kingdom. Having said that, I note that Mr Moreira attributes a delay of 5.5 weeks beyond Violet’s control attributable to both Covid-19 and holidays in July and August 2021. I am satisfied, therefore that Covid caused a delay of 8 weeks to the development about which Violet could do nothing.

The impact of Brexit on the availability of labour and materials

[113]The Brexit referendum was held on 23 June 2016 and the result known the next day. Neither expert attributes delay to Brexit. There is simply no evidence of causative delay. Nor is there any evidence of any steps taken by Violet to mitigate any delay that may have been caused. In the circumstances, while Brexit was an event beyond Violet’s control, it was a known risk from June 2016 and it did not actually happen until 31 January 2020. The consequences, if any, were delays which Violet had the power to mitigate but there is no evidence of any consequences specific to Violet or of any steps taken by it to mitigate those effects.

Miscellaneous delays

[114]There are various matters addressed by the experts in their reports which do not fit neatly into the issues as pleaded and put to me but I must deal with them. In Window 5 Mr Moreira puts the overall delay at 25.5 weeks while Mr Gouldby puts it at 12 weeks. I prefer Mr Moreira’s evidence because, while it may be true that some fit-out work proceeded during this period the subsequent delays in fitting out Phase 2 were very significant therefore I cannot be satisfied that the work carried out in this window could not have been carried out later without causing delay, had Violet simply got on with things in a reasonable manner. There is no evidence that the work carried out in Window 5 reduced delay further down the line.

[115]It is common ground that there was delay between 15 August 2020 and 29 March 2021 of between 19.5 (Mr Moreira) and 22 (Mr Gouldby) weeks (Window 6). All of the delay, the experts agree, is attributable to Violet. As the difference is relatively small I will take the midpoint of the two figures, as agreed by counsel and set the culpable delay at 21 weeks. Between 30 March 2021 and 15 October 2021 (Window 7), it is common ground that there was a delay of between 24 (Mr Moreira) and 29 (Mr Gouldby) weeks. This is attributable to delays in internal fit out works to phase 2. Mr Gouldby’s figure includes an allowance caused by the substation design/installation. For the reasons already given, he retreated from that position in his oral evidence. I proceed, therefore, on the basis that Mr Gouldby’s period of delay in Window 7 is 26 weeks having deducted the 3 weeks of non-culpable delay in his figures. I will adopt the mid-point of 25 weeks for the overall delay. Mr Moreira’s figures on delay attributable to matters outside Violet’s control are more favourable to Violet than are Mr Gouldby’s therefore I adopt them and accept that the delay within Violet’s control was 19.5 weeks, adjusting for the mid-point taken. The 5.5 weeks Mr Moreira attributes to Covid-19 I ignore because I have already taken it into account earlier in this judgment.

[116]The experts agree, following Mr Gouldby’s correction to his written evidence, that the delay in Window 9 was 30 weeks. Mr Gouldby attributes the whole of the delay to UKPN and the delay in meter connection. Mr Moreira’s evidence is that a 25 week delay was caused by the wait for a meter connection and the balance by subcontractor delay and the slow progress of the subcontractors. He is of the view that once testing could begin on 6 February 2023, the critical path shifted to the external works/contractors. I accept Mr Moreira’s evidence that there was a delay in commissioning utilities at the beginning of the window. Violet frequently failed to act promptly and it seems to me that Mr Moreira is correct therefore to attribute the delay to Violet. However, I prefer Mr Gouldby’s evidence as to the critical delay at the end of the window because the power switched off again after the initial connection and did not return until 9 March 2023. In summary, delay beyond Violet’s control amounted to 27 weeks as it was caused by UKPN and 3 weeks delay is attributable to Violet.

[117]As to Window 10, the experts agree that the delay was 61 (Mr Gouldby) or 63 weeks (Mr Moreira) weeks. I will take a rough mid-point given the small difference between them and attribute a delay of 62 weeks all of which, the experts agree, is attributable to Violet.

Summary of findings on delay

[118]I am satisfied that the construction of the development should have started on or around 15 September 2016 following demolition of the original building but I allow an additional 10.5 weeks for resolving the dispute with Mr Azam, I summarise my findings in relation to culpable delay in the table below: Window Dates Delay beyond Violet’s control 1 28/11/2016 – 3/7/2017 8.5 2 4/7/2017 – 17/12/2017 57.5 3 18/12/2017 – 22/3/2019 6 4 23/3/2019 – 16/1/2020 14 5 17/1/2020 – 14/8/2020 22 19 – Grenfell, 3 - Covid shutdown 6 15/8/2020 – 29/3/2021 0 7 30/3/2021 – 15/10/2021 5.5 8 16/10/2021 - 9/7/2022 0 9 10/7/2022 – 9/3/2023 27 10 10/3/2023 – 10/6/2024 0 Total 140.5 The experts were broadly agreed that the development would or should have been completed by late September 2018 (28 November 2016 plus 94 weeks) disregarding the delays set out above. I have found that there were delays of 140.5 weeks which were beyond Violet’s control therefore the time at which the development should have been completed was say, 13 June 2021. viii). What loss and damage has the Claimant suffered as a result of any of the first Defendant’s breaches of the Lease (‘the Breaches’) as referred to in the Amended Particularsof Claim? In relation to this question, are the damages recoverable limited to those whicharose on or prior to 1 September 2022 (date of forfeiture)?

[119]The heads of loss claimed by Mr Azam are: i) Loss of ground rent on residential flats; ii)Loss of rent on commercial premises; iii)Cost of incomplete works to the commercial premises; iv)Legal costs.

Loss of ground rent on residential flats

[120]As I have already determined, the development should have been completed by 13 June 2021. At this point, the sale of the residential flats would have commenced. The valuation experts agree that the value of the freehold reversion on the residential flats would have been £315,000 in September 2019 and £258,750 in July 2025. I assume this is on the assumption that all the flats had been sold by the 30 June 2022, the date the Leasehold Reform (Ground Rent) Act 2022 came into force as no ground rent would be payable for flats sold after that date. The expert valuations clearly contemplate the sale of the reversion on the residential flats in a single transaction which, I assume would not take place until the last of the flats had been sold. If one assumes, reasonably generously, that the flats would have been marketed about 3 months before completion, it seems to me that the flat sales would have been largely completed by the end of 2021 and, on any view, before 30 June 2022, therefore the freehold reversion on them would have had value as the leases would have fallen outside the 2022 Act. Both valuers proceed on this basis. I have no evidence as to the value of the reversion at that date and no means of calculating it. The best I can do is to assume a straight-line reduction between 2019 and 2025 and set the value of the reversion at £286,875.

Moreira was not working in the United Kingdom. He told me he was working abroad

[121]Mr Hutchings submits that Violet was under no obligation to sell the flats in 2021 or at all therefore I must set the loss under this head at £0 under the doctrine of minimum performance. In my judgment this is to ignore the reality of Violet’s situation in 2021/2022. The costs of the development had overrun as had the timeframe. Violet had to sell the flats as soon as possible. STB would not have permitted Violet to simply sit on them. They would have appointed administrators as they did in reality. In my view the chances of Violet not selling the flats forthwith upon completion of the development is vanishingly small. In my view it is not entirely apt to compare the grant of relief to damages for breach of contract. The court is aiming to ensure that the landlord is not disadvantaged by the tenant’s conduct or by the grant of relief. I am satisfied, on balance of probability, that the freehold reversion on the residential flats would have had a value of £286,875 in 2022, on balance of probability, prior to the coming into force of the 2022 Act and that Mr Azam has been deprived of this sum whether one considers it as the loss of the capital value of the reversion or as the loss of the rental income discounted for advance receipt. Further, the loss occurred prior to the date of forfeiture.

Loss of rent on the commercial premises

[122]It seems that the issue of the letting value of the commercial premises depends on the configuration in which the ground floor is let i.e. a single unit or as two separate units, and on the comparables selected. The relevant date for valuation is the date on which the development should have been completed, 13 June 2021.

[123]Helpfully, the gross internal areas of the commercial premises have been agreed as follows: Small retail unit, ground floor - 1141 ft² Large retail unit, ground floor - 3972 ft² Combined ground floor - 5,113 ft² Basement - 10,204 ft² Total - 15,317 ft² I use square feet as a measurement because that is the unit utilised by Mr Costello in arriving at his valuations. The schedule of transactions also provides rental values in square feet. Both experts agree that a rent free period must be included and the annual headline rent reduced to reflect that by averaging the rent free period over the first five years of the lease. However, Ms Hammonds provides for a rent-free period of 6 months while Mr Costello provides for a 3 month rent free period. Mr Costello says that this is standard industry practice. As far as the comparables relied upon by either expert are concerned, the rent free period, where known, was never less than 6 months. In the light of this, I cannot see how a rent free period of 3 months can be described as an industry standard. If it is, it does not seem to me to be applicable to lettings of the nature with which I am concerned. In the circumstances, I prefer and adopt the period utilised by Ms Hammonds. I have been provided with a schedule of the transactions referred to by either or both of the experts. 124. The competing valuations are as follow: Unit Area ft² Value per ft² £ Headline rent £ Average rent over 5 years 6 months rent free £ Party C* D** C D** C D** Small retail unit 1141 23.66 17.5 27,000 19,967.50 24,300 17,100 Large retail unit 3972 18.58 16 73,800 63,552 66,420 57,200 Combined retail unit 4898 19.40 16 95,000 78,368 85,500 70,000 Basement 10204 18.52 8 189,000 81,632 144,000*** 73,500 * All valuation dates ** As at 2024 adjusted to reflect a 6 month rent free period *** 14-months rent free period

[125]In her written report, Ms Hammonds arrives at her valuation of the small commercial unit on the basis of two preferred comparables, Unit 5, Corsican Square and 63 Violet Road. Mr Costello relies primarily on rates achieved on properties in Morris Road, London E1. The properties lie between numbers 17 and 22 Morris Road. The original lettings were in 2015 but Mr Costello adjusted his figures to reflect a 15% increase in headline rent for No 22 in 2018. Mr Costello further adjusted his figures by reference to his view of the market in 2024, in light of the effect of the September 2022 budget and the increased costs of fitting out.

[126]I consider Mr Costello’s valuations to be too low, largely, for the reasons given by Ms Hammonds in her supplemental report. Firstly, the units are less attractive than Violet 136. Road in that their frontage and signage are markedly less visible than that at Violet Road. They are not only set back from the street but the first (or possibly second) floor balconies cast a fairly deep shade over the shop frontages reducing visibility. Also, the frontages are obstructed by a number of pillars further reducing visibility of signage etc. I do not accept that the mid-terrace units are comparable to Violet Road. Secondly, the immediate area is significantly less developed with lower rise buildings and thus fewer residents. Thirdly, in 2015, the area had not been developed to the extent that it now is. I agree that the tenants in the Morris Road units are of much lower quality than those who have expressed an interest in Violet Road, such as Asda and Amazon, which reflects the commercial attractiveness of those units.

[127]Ms Hammonds’s preferred comparables are different to Violet Road too, which leads me to the view that her valuation is too high. Corsican Square is a fast-food restaurant right next to a DLR station. It is likely to have a much higher footfall than Violet Road while also having the advantage of being at the foot of a new build development. Also, fast-food outlets tend to have a slightly higher rental than retail properties or shops. The frontage of 63 Violet Road is right on the street while Violet Road is set back from the highway and only becomes visible as one draws closer to it, as I observed on my site visit. 63 Violet Road is set on a corner therefore it has two aspects visible from the street and is visible from a significantly greater distance.

[128]Taking all these matters into account, in my judgment, the rental value of the small retail unit is £21,700 per annum. In particular this reflects the greater or lesser visibility compared with the comparables, the greater or lesser footfall and the type of tenant likely to be attracted. I have also considered the other comparables put forward by the experts but as neither attributed much weight to them, neither do I.

[129]Neither expert considers that the large retail unit and the combined ground floor unit need to be separately valued. Ms Hammonds’s preferred comparables are 346 Rotherhithe Street and the Heads of Terms (“HoT”) agreed with Asda and Amazon for the subject property. Mr Costello agrees that 346 Rotherhithe Street is a helpful transaction, particularly as a 2023 rent review helps to set the context or background for updating rental values after October 2018. However, he again relies primarily on the Morris Road transactions, as he accepted in his oral evidence although he also said he bore in mind his other comparables.

[130]For the reasons already given in relation to the small retail unit, in my judgment, Mr Costello has undervalued the large/combined retail unit. Mr Costello does not attribute much weight to other comparables. It is difficult for me to see to what extent Mr Costello considered or bore in mind his other comparables. In particular, I do not understand why he considered 346 Rotherhithe Street to carry less weight than Morris Road when, on the face of it, that property appears to bear a greater resemblance to Violet Road.

[131]In my view, Ms Hammonds’s basic valuation approach was not shaken in crossexamination. Had she relied primarily on the HoT agreed with Amazon and Asda, I might have considered that she overvalued the larger/combined premises because HoT are not the equivalent of a completed transaction. However, the rental values in the HoT are supported by those in completed transactions such as 346 Rotherhithe Street and 8-12 Ratcliffe Street, London E1. In my view the valuation also sits comfortably with the rent achieved for the 397-399 Mile End Road property once one takes due account of the lower traffic on a relatively quieter street than Mile End Road. Having said that, I am not satisfied that a higher rate per square foot for the combined unit is justified, essentially on the strength of the HoT agreed with Asda. Neither expert thought the basis of valuation should be different as between the larger unit and the combined ground floor unit. It seems to me that one HoT is too tenuous a basis for attributing a higher rate per square foot to the combined unit particularly when other similar comparables do not support the higher figure but do support the figure put forward for the larger unit.

[132]For the above reasons I value the average rental income for the larger unit and the combined unit at £66,400 and £81,900 respectively. It seems to me equally likely that the ground floor will be let as 1 unit or 2 notwithstanding the higher rental value if let as 2 units. The reasons for this have been set out by Ms Hammonds and are – i) ease of managing one tenant and, ii) a potentially stronger covenant versus the higher rate. The evidence shows that Mr Azam was equally open to both possibilities. It seems to me, therefore, taking into account the two potential outcomes and their equal likelihood I should attribute a loss of £85,000 a year to lost rent in relation to the ground floor of Violet Road being the average of the two options.

[133]The difference between the experts on the rental value of the basement is very large with Ms Hammonds’s valuation being £144,000 per annum, almost double that of Mr Costello at £73,500. Ms Hammonds attributes a headline rent of £18.52 per square foot to the basement while Mr Costello’s figure is a mere £8.00. Their respective approaches explain this difference. Ms Hammonds relies entirely on the HoT agreed with The Gym Group in September 2021. Mr Costello considers that the rent per square foot on the basement is likely to be 50% of that on the ground floor. For this he relies on one particular comparable – Unit 8, 44-48 Wharf Road, London N1. Mr Costello also references a property on the first floor of The Paragon Centre in Mare Street, London E8 which is used as a gym.

[134]Both approaches are problematic. A valuation solely on one HoT is a very fragile basis of valuation. It is not a completed transaction. The subject to contract agreed rental figure is far outside what might be expected, being almost the same per square foot as the ground floor. Ms Hammonds found this to be surprising. She could not identify any other gym or equivalent at this rental level. Ms Hammonds considered The Paragon Centre but discounted it on the basis its location is not comparable to that of the subject property although she accepts that in terms of size, access and frontage, it is similar to the Violet Road basement. I have no evidence from The Gym Group as to the likelihood of it entering into a lease of the basement at this rental level. All Mr Azam has produced is an email from the company stating that their business strategy had changed.

[135]Mr Costello’s comparable at Wharf Road is, in my view, very different to the basement at Violet Road. It is comprised of a ground floor and a basement and used as offices. Access to the basement is through the ground floor office and there is no natural light. Mr Costello accepted that use of a basement as an office would attract a lower rent than that for gym use. Mr Costello considered The Paragon Centre to be a good comparable but more attractive as it had more natural light. Neither he nor Ms Hammonds considered Edward Helyn House to be a suitable compromise because it was a small space and, technically, a ground floor property albeit with a ramp in front of it. Ms Hammonds considered it to be a better comparable for the small retail unit. Having said that, I accept the principle that a basement, even with some natural light, is likely to attract a significantly lower price per square foot than a ground floor property.

Hammonds in her supplemental report. Firstly, the units are less attractive than Violet

[136]The HoT of September 2021 provide for a rent per square foot of £12.60. The £189,000 headline rent figure assumed a mezzanine floor providing additional floor space so the total area would be 15,000 square feet. The mezzanine floor was to be provided, presumably by Mr Azam or, alternatively, the tenant would receive an additional rent-free period on the basis it installed the mezzanine itself.

[137]It seems to me that some difficulties are likely to arise as a result of these HoT. Firstly, there is a requirement that the Gym Group would have “prominent, illuminated signage” on the building. It is difficult to see how Mr Azam could have complied with this requirement before June 2022. The ground floor frontage is largely glazed with very little space for signage for the ground floor commercial tenants. I note that the Asda HoT provided for the tenant to be permitted to alter the shop front, signage and fascia of the premises without the landlord’s consent. The Amazon HoT also provided for the tenant to be responsible for the shop front and for the tenant to install and alter signage without consent. It is unlikely that signage on the side of the building set back from the footpath and largely facing a brick wall would be acceptable to The Gym Group. Mr Azam would not be entitled to permit signage on higher floors because that would remain in the possession of Violet until all the residential flats were sold and the Lease surrendered. Even then, illuminated signage which impacts on the residential occupiers is unlikely to be permitted by the planning authority. Secondly, as emerged in the oral evidence of Mr Neave, there may be difficulties in installing a mezzanine without piercing the waterproof membrane or tanking and voiding the guarantee. It seems likely that a mezzanine level in a gym would have to be very robust and securely fixed to the walls to bear gym equipment therefore it also seems likely that this would be another issue affecting the completion of a lease to The Gym Group at the headline rent in the HoT. For these reasons, I am not satisfied that the HoT provides a sufficiently robust basis for valuing the likely rental income on the basement in 2021. It was an opportunity or chance but the prospects of completion at that rate per square foot were not sufficient.

[138]This leaves me in some difficulty as there are no sufficiently comparable properties on which to base a valuation. I start therefore with the rent per square foot agreed with The Gym Group - £12.60 not the £18.52 calculated in the Schedule provided to me. The potential lack of acceptable signage is likely to reduce this figure a little. I note the rental value of the Paragon Centre gym is £9.60 per square foot but neither expert puts much weight on this and the property is in a different area where the rental values may also be different. On the assumption that some accommodation could be reached on signage, in my judgment, the rental value of the basement is likely to have been in the order of £11.75 per square foot. This puts the rent per square foot at roughly, 2/3rds of the ground floor which seems reasonable for a basement property. The figure is 20% higher than that for The Paragon Centre but within acceptable limits. It is nearly 50% higher than that for the basement of Wharf Point. The latter differential is justified because of the existence of natural light, the fact that it is a new build not a warehouse conversion, location and use. I appreciate that this is not the most robust of valuations, but it is the best I can do on the evidence I have.

[139]I assume a 6 month rent free period and set the rental value of the basement at £107,900 per annum. This gives a total rental income for the commercial premises of £192,900 per annum.

Cost of Incomplete Works to the commercial premises

[140]As already stated, Mr Neave’s report was not subject to significant challenge. He concluded that the vast majority of the works have been carried out in a good and workmanlike manner in accordance with the Lease and to a high quality. The outstanding works required are those set out at paragraph 8 of his report. The works required to the residential parts of the premises, including all snagging, defective and incomplete works are: i) Touching up of paintwork to skirtings, doors and joinery; ii) Removal of protective film to kitchen door units; iii) General clean and removal of redundant materials including waste materials; iv) Final decorations to joinery in residential units; Areas of damp plasterboard and mould growth around the balcony door review to Flat 201; v) Areas of peeling paint finish to the metal balcony decking in numerous locations; vi) Raised nosings to staircase and level change on fire escape thresholds; vii) Drainage grills required to outlets, reinstate paving slabs; viii) Complete finish to the parapet copings with an aluminium capping piece as shown on drawing No. 3082-AA(27) 01 Rev C.

[141]As far as the commercial premises are concerned, the works required are those set out in Mr Neave’s document entitled “100 Violet Road – Budget Cost of Works” (“the Neave schedule”) excluding the final two items which I have included in the preceding paragraph at items vii) and viii). I also exclude the “Lift to Basement” having refused the Claimant permission to amend his Reply and Defence to Counterclaim to include this item at the outset of the trial. I refused this amendment because it was the first time this item had been mentioned in any pleading and it had not been addressed by Mr Neave in his report, in consequence. I will not set out the remainder of the items here but a schedule of them can be appended to the order. I accept Mr Neave’s costings for each of the items on the Neave schedule save that, following his oral evidence that contingency fees range from 15% to 20%, the appropriate figure in this case should be 17.5%. In light of Mr Neave’s evidence to the effect that there would be a major reduction in consultants and engineers’ fees if the goods lift is excluded, I have reduced these by £15,000. Mr Neave was unable to help me with a more precise figure. It seems to me that £15,000, almost 25%, constitutes a major reduction and is the best I can do on the evidence. constitutes a major reduction The total cost of the works, excluding the drainage grills and parapet copings is £264,364.38 (£452,364.38 - £150,000 - £500 - £37,500). To this figure must be added preliminary costs of £85,280 and fees of £47,250 yielding a total of £396,894.38. The contingency provision on that sum is £69,456.52 at 17.5%. This gives a grand total of £466,350. excluding VAT. Adding VAT of 20% to these figures produces a figure of £599,621.08. I do not reduce this figure any further by reference to those parts of Mr Neave’s costings attributable to the increased depth of the basement because, I am satisfied that Mr Azam agreed to pay £378,274.80 (£315,229 plus 20% VAT) in relation to those increased costs and he would be paying twice if a deduction to Mr Neave’s figures was also made. Deducting £378,274.80 from the costs of completing the specified works to the commercial premises yields a net sum payable by Violet of £181,346.28. I allow a period of 7 months to complete the works as, in my view, there ought to be some contingency provision for time as well as costs. There is no evidence that the installation of a lift would have extended the time to complete the works therefore I proceed on the basis that the lift installation could have been concurrent with the other works. ix). Have either of the Defendants shown in the circumstances that it is entitled to relief fromforfeiture in relation to any admitted (or proven) material breaches at the date of the forfeiturenotice?

[142]In my judgment the answer to this is plainly yes. Since forfeiture, the development has been substantially completed, and a PCC has been obtained. There is no real complaint about the state of the residential part of the development. Minor snagging issues can be addressed very quickly. The flats are in a state to be sold. It is fair to say that the commercial premises have not been completed in accordance with the Lease or the planning permission notwithstanding the PCC. As a result of the works carried out after the s.146 notice and forfeiture, the value of the building has increased enormously. STB hope to recover its capital advances of £25 million odd through the sale of the flats. By comparison, Mr Azam’s claimed losses are £2.8 million odd, including claimed litigation costs of c.£1,100,000. Refusing relief would give Mr Azam a wholly disproportionate windfall at, particularly, STB’s expense. The breaches, whether related to forfeiture or not, have been remedied save for, primarily, the incomplete works to the commercial premises. Conditions can be imposed to ensure that Mr Azam does not suffer loss and damage as a result of the incomplete works. The Defendants would prefer if relief was granted to Violet and I see no reason for refusing that request.

[143]For the avoidance of doubt, I would, in any event, have granted relief to EEH. The Property, subject to EEH’s Sub-lease, is exactly what Mr Azam covenanted for and the delay has caused him no loss. The rent payable under the Sub-lease is a peppercorn, if demanded. EEH paid £1.232 million for the Sub-lease and has itself lost out on rental income. The windfall to Mr Azam would be significant and is unjustified. x). What terms should be imposed as a condition of relief? In particular, ought relief to beconditional on: Completion of any Works as defined in the Lease, and as identified in the joint expert report?

[144]Violet must complete the works required to the residential premises. Violet will remain the tenant and in possession of those premises and bound to complete the works required by the Lease. Further, the works are largely snagging matters which it is not reasonable to expect Mr Azam to address. Frankly, I do not understand why the completion of the parapet roof and snagging works have not been undertaken but that is on the Defendants’ heads. It is likely to be the case that purchasers of the flats will require the building to be completed and snagging addressed. As the vendor, Violet is best placed to deal with those issues. The works can be completed in a very short space of time and should not delay relief taking effect. If there is delay to carrying out the works, the Defendants will have no-one to blame but themselves.

[145]However, in my judgment Violet should not be required to complete the works to the commercial premises. Mr Azam will be the sub-tenant and in possession of them in compliance with his obligation under the Lease. He has had a tendency to raise unjustified disputes about works such as the adequacy of the escape routes and the thickness of the basement slab. This case has caused extremely high feelings in Mr Azam, understandably. Leaving scope for future disagreement about any outstanding works is a recipe for disaster, in my view, or, at least, scope for further litigation. In a case such as this, relief should be granted on terms that are very clear and may be complied with without scope for further dispute. If forfeiture is conditional on completion of works to the commercial premises, the date on which relief is granted may be unclear which is not in any party’s interest. Mr Azam will be put in funds to complete the commercial premises in accordance with the Lease/planning permissions and be compensated for any further loss of rental income for the period it will take to complete the works.

Payment of any damages identified in answer to issue viii) and/or any other sums?

[146]A condition of relief is that Violet pays or secures to Mr Azam damages attributable to the matters set out in issue viii). As set out above, I am satisfied that my discretion under s.146 is not limited to conditions relating to the subject matter of the s.146 notice. In order to ensure that Mr Azam is not prejudiced by the grant of relief he must be paid or security provided for the following sums: i) £286,875 in relation to loss of ground rent on the residential flats; ii) £181,346 being the costs of the incomplete works to the commercial premises less the sum he agreed to pay for the Landlord’s Works; iii) £112,525 in lost rent for the seven months needed to complete the works to the commercial premises; iv) £851,975 in lost rent on the commercial premises from 13 June 2021 to the date of judgment (4 years and 7 months); v) Interest on i), iii) and iv) above. I do not award interest on item ii) as it is not an out-of-pocket loss but the cost of carrying out future work.

[147]The amended Particulars of Claim seek interest at 3% above Barclays base rate from time to time. In my view it is unlikely that this figure will, overall, exceed the judgment rate of 8% therefore I award simple interest on the basis sought. Payment of, or security for, the sum due under clause 16.3 of the Agreement for Lease?

[148]No, for the reasons given above, Violet is not liable to pay this sum (£500,000). The Lease does not require such payment. The Agreement for Lease was made with a different corporate entity and there is no basis for, effectively, piercing the corporate veil and treating Kingport and Violet as one for the purposes of the Agreement for Lease. Nor is there any sufficient evidence to establish that Violet agreed to take on Kingport’s obligation under that agreement

What order should be made regarding the Claimant’s costs as a condition of relief?

[149]I agree that, in principle, Violet must pay Mr Azam’s costs of the claim in so far as the claim relates to Violet. I also accept that such costs are usually ordered on the indemnity basis although a different order may be made in appropriate circumstances. I am satisfied that either payment of those costs or provision of security for them should be a condition of relief. Security may be a charge over the proceeds of sale of the flats up to the required amount or such other security as the parties may agree. Such a charge could also cover the monies due under paragraph 146 above. If there is to be a delay in setting a hearing to determine costs and any other matters, I invite the parties to act reasonably in agreeing, at least, appropriate security so that the date of relief is fixed and the residential flats may be sold. Unreasonable conduct in this regard may be addressed in costs and/or interest payments going forwards. I am not currently satisfied that the Defendants, or any of them, should pay the entirety of Mr Azam’s costs in so far as they relate to the Third Defendant as I cannot see any proper basis for opposing the Third Defendant’s claim for relief, at least once it was clear that Violet would be left in possession for the purposes of completing the residential flats. The costs related to the claim against the Third Defendant are likely to be relatively small and there may be some set-off involved therefore I do not consider that payment of those costs should be made a condition of relief.

[150]In summary, I grant the Defendants’ applications for relief from forfeiture on terms that Violet and/or STB pays or provides security for the sum of £1,432,721 together with interest which I leave the parties to calculate on the basis set out above and secures costs in the sum of £1,100,000 which figure should not be taken as indicative of the costs Violet will have to pay but is a figure chosen on the basis of the Claimant’s closing summary of loss for the purposes of achieving a clear date on which relief is granted. In addition, Violet must complete the parapet works and snagging works to the residential flats.

[151]I apologise for the length of this judgment which is attributable to the number of issues I was asked to decide and the difficulty of dealing with the causes of delay to the development and calculating rental values in light of the wide gulf between the experts and the lack of contemporaneous explanatory documents. I also thank the parties for their patience.